Lotte Chemical's logo is seen in this image provided by the company. [YONHAP]
Lotte Chemical, the chemical arm of Korea's retail conglomerate Lotte Group, said Monday it turned to the black in the first quarter on increased margins due to the lagging effect of feedstock costs amid the war in the Middle East.
It posted a net profit of 33.5 billion won ($22.7 million) in the first three months of the year, turning from a loss of 246.3 billion won a year earlier, the company said in a regulatory filing.
Operating income for the January-March period was 73.5 billion won, compared to a loss of 126.6 billion won a year ago. Revenue rose 1.8 percent to 4.99 trillion won over the period.
Lotte Chemical said it returned to profit in the first quarter on improved margins supported by the lagging effect, the time gap between changes in crude oil prices and their impact on production costs.
The company said improved spread between raw material costs and product selling prices helped offset risks stemming from global supply chain volatility and rising feedstock prices linked to tensions in the Middle East.
Lotte Chemical produces basic materials, such as polyethylene and ethylene, used in plastics and industrial chemicals widely applied in construction, automotive and other sectors.
The basic chemicals division posted sales of 3.45 trillion won, and the advanced materials division reported sales of 1.02 trillion won in the first quarter.
Looking ahead, Lotte Chemical said it plans to continue optimizing operations, restructuring its petrochemical business and improving its portfolio mix to strengthen profitability.
The company has been restructuring its loss-making petrochemical division since early last year to improve facility utilization and bolster its financial position through the sale of noncore assets.
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