Lotte Fine Chemical's Q3 operating profit falls 20.3% to 22 billion won as cost pressures erode profitability

[Financial News] Lotte Fine Chemical's operating profit fell in the third quarter of this year despite higher sales, as raw material prices rose. Sales increased 18.5% from the same period a year earlier amid higher international ammonia prices and expanded sales of semiconductor materials, but operating profit declined 20.3% as the cost burden of ECH, a raw material for epoxy resin, grew.
Lotte Fine Chemical said on the 29th that preliminary results for the third quarter of this year showed revenue of 525.3 billion won and operating profit of 22 billion won.
The increase in sales was driven by higher international ammonia prices and expanded sales of TMAC, a semiconductor material. Operating profit, meanwhile, declined due in part to higher raw material prices for epichlorohydrin (ECH), a key product in the company's chlorine-related product line.
Lotte Fine Chemical announced in July that it would invest 13 billion won to expand capacity for TMAC, a semiconductor material. The company plans to increase production capacity by about 16% to 64,000 metric tons per year by 2028. Sales are also growing for products made at its expanded cellulose plant for food and pharmaceutical applications, which began full-scale operations in the first half of this year.
The company is also expanding its clean ammonia business. On the 8th, it signed a contract to supply green ammonia for power generation to a distributed power plant in Pohang being developed by Amun Energy, a joint venture between GS E&C and U.S.-based Amogy. After commercializing green ammonia bunkering (supplying fuel to vessels) in April, it supplied green ammonia to an ammonia-powered ship on the 25th.
Lotte Fine Chemical CEO Jung Seung-won said, “Sales increased in the third quarter, driven in part by expanded sales in our TMAC semiconductor materials business.” He added, “We will continue to increase the share of our specialty business and secure future growth engines through investment in expanding TMAC capacity and the growth of our clean ammonia business.”
[email protected] Kim Mi-hee Reporter