Lotte Chemical Corporation (011170) Q1 2025 earnings summary

Executive summary

• Q1 revenue was KRW 4,901.8bn, down 3.6% YoY; operating loss was KRW 126.6bn and net loss KRW 246.3bn.

• EBITDA rose KRW 74.1bn QoQ to KRW 173bn; net loss narrowed from KRW 1,144.2bn in Q4 2024.

• Recovery visibility remains limited amid oversupply and policy uncertainty, though gradual YoY improvement is expected as capacity ramp-up pressure eases and feedstock prices stabilize.

Financial highlights

• Q1 revenue was KRW 4,901.8bn, up 0.1% QoQ and down 3.6% YoY.

• Operating loss was KRW 126.6bn, improving KRW 107.5bn QoQ; EBITDA was KRW 173bn, up KRW 74.1bn QoQ.

• Pretax loss was KRW 241.1bn; net loss was KRW 246.3bn, compared with KRW 1,144.2bn in Q4 2024.

• Performance benefited from improved spreads, production efficiency and the absence of prior-quarter one-off costs.

Outlook and guidance

• Q2 performance is expected to be broadly flat QoQ; Daesan and overseas subsidiary maintenance may limit improvement.

• Basic Chemicals expects flat Q2 performance: lower BD prices weigh on profit, while lower naphtha prices in May and June may widen spreads.

• 2025 petrochemical losses are expected to narrow YoY, with gradual improvement as cost pressure eases and sales prices recover.

• Positive cash flow is cautiously projected for 2025; after major projects finish this year, investment may be kept within EBITDA from next year.