reports
- IMS Research Team
Lotte Chemical Pakistan: 2QCY23 Review - Lower volumes lead to sharp u...
LOTCHEM has posted NPAT of PKR0.3bn (EPS: PKR0.21) in 2QCY23, down 89% YoY and 88% QoQ. The result came much below our expected NPAT of PKR1.7bn (EPS: PKR1.18) due to lower sales volume amid plant shutdown during 2QCY23 and higher one –off effective tax due to super tax. This takes 1HCY23 NPAT to PKR2.8bn (EPS: PKR1.88), down 47% YoY. The company did not declare any dividends against our expected payout of PKR1/sh. KEY HIGHLIGHTS FOR 2QCY23 RESULT: * Revenue clocked in at PKR16.4bn, down 45%...
- IMS Research Team
Jun'23 Result Previews: Low demand and one-off super tax to clip earni...
* We expect the IMS Chemicals Universe (LOTCHEM, EPCL and LCI) to post 2Q2023 combined NPAT of c.PKR4.5bn, down 21% QoQ and 31% YoY. * Muted demand from the textile sector and resultantly lower sales volume, together with the one-off impact of super tax, will lead to a decline in earnings for LOTCHEM and LCI. We expect a payout of PKR1.0/sh & PKR15.0/sh from LOTCHEM and LCI, respectively. * We expect a sharp lift in gross margins for EPCL on resumption of natural gas supply post-wi...
- IMS Research Team
Lotte Chemical Pakistan: LOTCHEM - Higher realized primary margins and...
LOTCHEM posted NPAT of PKR2.5bn (EPS: PKR1.68) in 1QCY23, up 26% QoQ, but down 3% YoY. The result came above our expected NPAT of PKR1.5bn (EPS: PKR1.01) due to higher-than-expected gross margins. The result was accompanied with PKR2.0/sh interim dividend, above our expected payout of PKR1.0/sh. Key highlights for 1QCY23 result: * Revenue clocked in at PKR22.1bn, up 7% QoQ and 9% YoY, largely in-line with our expectation of c.PKR21.8bn. The revenue growth is mainly attributable to significan...
- IMS Research Team
Pakistan Chemicals: March'23 Result Previews
ONE-OFF LCI GAIN TO OVERSHADOW CORE DISCREPANCIES We expect the IMS Chemicals Universe (LOTCHEM, EPCL and LCI) to post combined core NPAT of c.PKR3.6bn in the quarter ended March 31st, down 40%QoQ /64%YoY. However one-off capital gain of PKR8.3bn on the sale of NutriCo Morinaga stake will elevate LCI profits to PKR9.1bn and therefore, will take reported sector profits to PKR11.9bn up 21% YoY and 2.2x QoQ. On a more granular level, sales volumes are likely to decline amid reduced textile expor...
- Team AKD Research
LOTCHEM_3QCY22 Analyst Briefing, (AKD Off the Analyst's Desk Nov 16, 2...
LOTCHEM: 3QCY22 Analyst Briefing Lotte Chemical Pakistan Limited (LOTCHEM) held its corporate briefing for 9MCY22 today, wherein the following was discussed: LOTCHEM is the only manufacturer of PTA in the country, with an annual capacity of 500KT. The annualized market is estimated at ~750KT. To recall, NPAT was recorded at PkR8.1bn in 9MCY22 (higher by 151%YoY), on net sales of PkR79.5bn (higher by 65%YoY). The bottomline growth is attributable to better PTA-PX margins during the per...
- Ali Aziz Soorty
Lotte Chemical Pakistan: 3Q22 Result Review: Strong earnings but no pa...
LOTCHEM posted NPAT of PKR2.7bn (EPS: PKR1.79) in 3QCY22, up c.3.0x YoY and 91% QoQ. The result is in line with our expected NPAT of PKR2.6bn (EPS: PKR1.74). The management opted out of a payout this quarter against our expectation of a PKR1.0/sh. Key highlights: * Revenues clocked in at PKR29.6bn, up 71% YoY (flat QoQ), and beating our expectation of c.PKR27.5bn. The strong YoY revenue growth is likely due to better textile demand, coupled with strong PTA-PX spreads. * The company post...
- Ali Aziz Soorty
Pakistan Chemicals – Earnings affected by lower volumes and primary ma...
PAKISTAN CHEMICALS – SEP’22 RESULT PREVIEWS We expect IMS Chemicals Universe (LOTCHEM, EPCL and ICI) to post combined NPAT of c.PKR6.6bn up by 6%/12% QoQ/YoY, mainly due to higher topline growth and in the absence of one off super tax impact on a sequential basis. LOTCHEM’s primary margins have been relatively stable and remained upwards ( +5% QoQ). This will likely to safeguard its margins and profitability as compared to peer companies. Sales volumes of IMS Chemical universe are likely to d...
- Ali Aziz Soorty
Lotte Chemical Pakistan: 2QCY22 review – Earnings beat amid higher top...
Beating street estimates, LOTCHEM posted NPAT of PKR2.79bn (EPS: PKR1.84) in 2QCY22, up a sharp 189% YoY and 7% QoQ. This is against our estimate of PKR1.2bn (EPS: PKR0.81), where the major deviation stemmed from higher-than-expected PTA-PX spreads and topline growth. The company also announced a surprise healthy payout of PKR 4/sh against its normal payouts in 3Q each year. KEY HIGHLIGHTS: * Revenues clocked in at PKR29.6bn, beating our expectation of c.PKR26.2bn, up 82% YoY and 46% QoQ. T...
- Ali Aziz Soorty
Pakistan Chemicals – Earnings to slide amid one-offs and lower spreads
We expect IMS Chemicals Universe (LOTCHEM, EPCL and ICI) to post combined NPAT of c.PKR3.2bn which is set to decline sharply by 68%/39% QoQ/YoY, mainly due to (i) decreasing international spreads (in case of LOTCHEM and EPCL), (ii) higher exchange losses and (iii) one-off super tax impact. The IMS chemicals universe is expected to witness a drastic hit on profitability, majorly led by lower margins and one off tax adjustment in the form of super tax. LOTCHEM is the most safeguarded company in...
- Ali Aziz Soorty
Lotte Chemical Pakistan: 1QCY22 Result Review: All time high GMs lead ...
LOTCHEM has reported NPAT of PKR2.6bn (EPS: PKR1.73) in 1QCY21, up a sharp 60% yoy and 85% qoq. This is a strong earnings beat vs. our estimated NPAT of PKR1.3bn (EPS: PKR0.87), where the major deviation stemmed from higher-than-expected PTA-PX spreads. The result accomplished without any payout, in line with our expectation, as the company has track record of paying dividends in 3Q. KEY TAKEAWAYS FROM 1QCY22 RESULT INCLUDE: * Revenues have clocked in at PKR20.3bn, in line with our expectati...
- Ali Aziz Soorty
Pakistan Chemicals: Earnings to sequentially lower amid normalized spr...
* We expect IMS Chemicals universe (LOTCHEM and EPCL) to post combined net profits of PKR5.1bn for 1QCY22, mainly led by healthy international spreads. Spreads of both PTA and PVC benefited from global macroeconomic uncertainty (Russia - Ukraine conflict and China power crisis). * LOTCHEM is expected to post 1QCY22 EPS of PKR0.87, where PTA-PX spreads averaged US$115/ton during the quarter. Spreads were slightly lower from their recent peak due to consistently rising PTA prices; while n...
- Azan Memon
Lotte Chemical Pakistan: 4QCY21 review – Higher-than-expected revenues...
LOTCHEM has reported 4QCY21 NPAT at PKR1.4bn (EPS: PKR0.93), up a massive 125% qoq and 30% yoy. This is a strong earnings beat vs. our estimated NPAT of PKR1.2bn (EPS: PKR0.77) with the deviation largely stemming from better than expected sales volumes and resultantly better GMs. This takes CY21 NPAT to PKR4.6bn (EPS: 3.07), up c.120% yoy. There was no dividend announced, in line with our expectation. KEY TAKEAWAYS FROM 4QCY21 RESULTS: * Revenues have clocked in at PKR18.9bn, better than our...
- Azan Memon
Pakistan Chemicals: Strong spreads will underpin earnings growth
We expect our Chemicals universe (LOTCHEM and EPCL) to post combined profitability of PKR5.4bn for 4QCY21 led by healthy international spreads. Spreads of both PTA and PVC benefited from global demand-supply mismatch. LOTCHEM is expected to post 4QCY21 EPS of PKR0.77 (CY21 EPS: PKR2.90) where PTA-PX spreads averaged US$155/ton during the quarter. Spreads were bolstered by new PX capacities in the region, which depressed its prices. We prefer LOTCHEM between the two, because there is no risk o...
- IMS Research Team
Lotte Chemical Pakistan: Outlook for spreads and demand remain sanguin...
* We resume coverage on LOTCHEM with a Buy rating and a new Dec 2022 TP of PKR19.0/sh. We have raised our CY21/22f EPS estimates to PKR2.64/2.40, based on our outlook of average PTA-PX spreads of US$135/120 per ton in CY21/22f. * We are optimistic about PTA-PX spreads remaining in the healthy region during 4Q21 and CY22, because of new PX capacity additions in the region. However, spreads can moderate marginally during CY22 due to new downstream PTA capacity additions, higher domestic g...
- Shahzaib Naeem
Lotte Chemical Pakistan: 1QCY21 result review – lower than expected GM...
Lotte Chemical Pakistan (LOTCHEM) has posted a net profit of PKR1.6bn for 1QCY21 (EPS: PKR1.08), up a massive 28.0x yoy and 51% qoq. The qoq increase can be attributed to an increase in PTA-PX spreads and resultant gross margins to 15.4% from 13% in 4QCY20. The 1Q result has come below our EPS estimate of PKR1.23, majorly because of lower than expected gross margins (15.4% instead of 19% expected). KEY HIGHLIGHTS OF 1QCY21 RESULT Revenue has clocked in at PKR14.6bn up 25% yoy and 22% qoq, on ...
- Shahzaib Naeem
Lotte Chemical Pakistan: 1Q21 Preview: Healthy PTA-PX spreads to lift ...
We estimate Lotte Chemical (LOTCHEM) to post a 1QCY21 NPAT of PKR1.86bn (EPS: PKR1.23), up a massive 32x yoy and 86% qoq. The sharp growth in earnings is attributed to, (i) exceptional PTA-PX spreads of US$135/ton, (ii) inventory gains as PTA/PX prices rose sharply qoq, and (iii) sales volume coming off a low base in SPLY. 1QCY21 KEY RESULT EXPECTATIONS: We expect LOTCHEM to sell c.123,000 tons of PTA and post revenues of PKR13.4bn, increasing 14% yoy on the back of, (i) PTA prices increasing...
- IMS Research Team
Lotte Chemical Pakistan: CY20 Result Review: Strong end to the year
Lotte Chemical Pakistan (LOTCHEM) has posted a net profit of PKR1.1bn for 4QCY20 (EPS: PKR0.72), up 73% yoy and 18% qoq. This takes CY20 net profits to PKR2.1bn (EPS: PKR1.40), down 60% yoy. The 4Q result has beaten our EPS estimate of PKR0.43, majorly because of higher revenues. LOTCHEM also announced a cash dividend of PKR0.75/sh. Key highlights of 4QCY20 result: Net Sales of PKR12.0bn exceeds our estimate of PKR10.3bn, which could be because of higher volumes (likely more towards the end o...
- Zain Rizvi
Lotte Chemical Pakistan: Raise to Buy with an improved outlook on spre...
We update our investment case on LOTCHEM with a Buy rating from Neutral and a new Dec’21 TP of PKR18.0/sh. We have raised our CY21/22f EPS estimates to PKR1.94/1.85 (up c.50%), in the backdrop of healthier-than-expected PTA-PX spreads. The revision in our estimates stems from (i) improved outlook for PTA-PX spreads, (ii) higher demand from the Textile space, and (iii) healthy cash balance and an unlevered balance sheet. Prospects for demand have rebounded considerably from CY20 lows, amid rob...
- Zain Rizvi
Pakistan Chemicals: 4QCY20 preview – Earnings momentum to continue
We expect our Chemical Universe to post cumulative 4QCY20 NPAT of PKR3.4bn, up 104% yoy and 23% qoq. This will take the cumulative CY20 NPAT to PKR6.6bn, down 29% yoy, primarily due to 70% yoy decline in LOTCHEM’s earnings, owing to exceptionally high PTA-PX spreads in CY19. EPCL’s profits during 4Q are expected to rise twofold yoy due to (i) increase in PVC sales led by a surge in demand from the construction space, (ii) staggering core delta (average c.US$690/ton) and (iii) revival of caust...
- Zain Rizvi
Lotte Chemical Pakistan: 9M CY 20 analyst briefing takeaways
LOTCHEM posted a 9MCY20 NPAT of PKR1.04bn (EPS: PKR0.69) down by 78%yoy, compared to NPAT of PKR4.73bn (EPS: PKR3.13) in SPLY. Majority of the 9M profits was contributed by 3Q, where the company posted an NPAT of PKR0.93bn (EPS: PKR0.61) compared to PKR1.68bn (EPS: PKR1.11) in SPLY. * Company’s revenue plunged by 44% yoy during 9MCY20, primarily stemming from Covid-19 induced lockdown and lower demand from the downstream Industry (Textile and PET). Sales have recovered sequentially, gaining ...
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