Lotte Chemical Corporation (011170) investor relations material

Executive summary

• Q3 2026 revenue was KRW 5.3951tn, up 12.7% YoY and down 5.1% QoQ; operating loss was KRW 281.390bn, versus KRW 110bn operating income in Q2.

• 9M revenue was ₩16.072tn; operating loss narrowed to ₩97.773bn from ₩509.642bn in 9M 2025, while net loss was ₩61.843bn.

• Q3 pressures included spread compression, higher feedstock costs, unfavorable FX and freight, and weak downstream demand; restructuring and easing temporary costs are expected to support narrower Q4 losses.

Financial highlights

• Q3 EBITDA was KRW 51.1bn, versus KRW 458bn in Q2 and KRW 167bn in Q3 2025; operating margin was -5.2%.

• Q3 pre-tax loss was KRW 398.4bn and net loss from continuing operations was KRW 289.793bn; pre-tax income declined QoQ amid operating losses, weaker equity-method gains and a Q2 derivatives valuation-gain base effect.

• 9M operating cash flow was -₩568.438bn; cash and equivalents were ₩1.596tn at Sept. 30, versus ₩1.870tn at Dec. 31, 2025.

Outlook and guidance

• Q4 operating losses are expected to narrow as temporary cost pressures ease and restructuring progresses; oil and feedstock volatility and limited cost pass-through remain risks.

• Basic Chemical expects continued oversupply and delayed recovery; Advanced Materials anticipates higher volumes and gradual improvement, while Fine Chemical expects seasonal softness and Energy Materials expects gradual improvement.

• Priorities include operational and inventory adjustments, defending selling prices, recovering freight costs through pricing, expanding specialty sales and cutting costs.