KUALA LUMPUR (Jan 30): Lotte Chemical Titan Holding Bhd (LCT) net profit for the fourth quarter ended Dec 31, 2019 (4QFY19) surged to RM187.76 million against RM7.22 million a year ago, mainly due to a one-off gain on the disposal of equity interest and lower write down of inventories.

In a bourse filing today, LCT said revenue for the quarter fell 15.53% to RM1.97 billion, from RM2.34 billion previously.

Earnings per share jumped to 8.26 sen versus 0.32 sen a year earlier.

LCT did not declare any dividend but said an announcement would be made at a later date.

LCT explained that its net profit was due to a one-off gain on the disposal of equity interest in LACCLCC ("LACC") to Eagle US2 LLC ("EagleUS") of US$33.2 million, capitalisation of depreciation of right-of-use assets of RM6.6 million and lower write down of inventories to net realisable value by RM 31.1 million.

For the full year ended Dec 31, 2019 (FY19), LCT said its net profit fell to RM439.72 million from RM783.33 million, due to margin squeeze resulting from lower product selling prices.

LCT said its revenue dropped to RM8.44 billion from RM9.24 billion, due to decrease in average selling price.

It said the lower selling price was mainly due to diversion of cheaper polyolefin supply from USA into the SEA region as a consequence of the US-China trade war, as well as softening of global economic growth.

On its outlook for 2020, LCT said domestically, new additional capacities coming onstream in 2020 are expected to create short to medium-term supply and demand imbalances.

“Looking at the prevailing adverse external market conditions, the outlook for petrochemical industry is still expected to remain challenging in the year ahead, with some support from the Asian region growth momentum,” it said.

At midday break today, LCT dipped 0.46% or 1 sen to RM2.15, valuing it at RM4.96 billion.