Lotte Chemical Posts KRW 281.4 Billion Operating Loss in Q3... Yeosu Restructuring to Be Completed in First Half of Next Year

Returned to the red amid Middle East risks and rising freight rates
Daesan integration completed; high-value-added line expansion to drive business transformation

Lotte Chemical returned to an operating loss in the third quarter. The company was affected by sharp fluctuations in raw material and product prices amid geopolitical risks in the Middle East, as well as rising ocean freight rates. It plans to reshape its basic chemicals business and expand its high-value-added products to build a business structure that is less vulnerable to industry conditions.

Lotte Chemical said on November 6 that it recorded consolidated revenue of KRW 5.3951 trillion and an operating loss of KRW 281.4 billion in the third quarter.

By business segment, Basic Chemicals posted revenue of KRW 3.7235 trillion and an operating loss of KRW 216.6 billion. The segment was affected by a reverse-lagging effect resulting from lower raw material prices, narrowing spreads, and a decline in foreign exchange rates. Advanced Materials recorded revenue of KRW 1.0893 trillion and an operating loss of KRW 15.4 billion. Subsidiary Lotte Fine Chemical posted operating profit of KRW 22 billion. Lotte Energy Materials' revenue nearly doubled year-on-year to KRW 289.7 billion as sales for energy storage systems (ESS) in North America increased, but it continued to post an operating loss of KRW 21.3 billion.

Business restructuring is gaining momentum. In September, the Daesan plant completed the launch of an integrated joint venture with HD Hyundai Chemical. At the Yeosu plant, the company is discussing details with its partners, aiming to launch an integrated company with Yeochun NCC in the first half of 2027 following a spin-off. The plan is to improve operating efficiency after integration and increase the share of high-value-added products to boost profitability in the basic chemicals business.

The company is also expanding its high-value-added businesses. Since September, all production lines at the Yulchon compounding plant have been operating, giving it an annual capacity of 500,000 tons and making it the largest single-site compounding production facility in Korea. In the first quarter of 2027, the company plans to begin operating an additional line dedicated to high-value-added products to increase the share of specialty products. Lotte Fine Chemical has also begun expanding production of tetramethylammonium hydroxide (TMAH), a raw material used in semiconductor developers.

Lotte Chemical said, "We are proactively pursuing business restructuring to secure competitive strength against industry fluctuations amid uncertainty in the domestic and global business environment. By shifting to a business structure centered on high-value-added products, we will establish a stable earnings base."

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