Lotte Chemical Pakistan Delivers Significant Profit Improvement in First Quarter of 2026

Lotte Chemical Pakistan Limited has reported a strong improvement in profitability for the first quarter ended March 31, 2026, despite a decline in revenue compared with the same period last year.

According to the company’s unaudited financial statements, revenue from contracts with customers stood at Rs20.86 billion during the quarter, compared with Rs21.51 billion in the first quarter of 2025. While sales were slightly lower, improved cost management helped the company achieve a substantial increase in gross profit.

Gross Profit More Than Doubles

The company’s cost of sales declined to Rs17.93 billion, down from Rs20.17 billion a year earlier. As a result, gross profit rose sharply to Rs2.93 billion, compared with Rs1.33 billion in the corresponding quarter of 2025.

This improvement translated into a significant rise in operating profit. Lotte Chemical Pakistan recorded Rs2.47 billion in operating profit, compared with Rs1.00 billion in the first quarter of 2025.

Profit before taxation also increased substantially to Rs2.41 billion, more than double the Rs1.09 billion recorded in the same period last year.

Net Profit Rises 123%

The strongest highlight of the quarter was the company’s bottom-line performance. Profit after taxation reached Rs1.47 billion, compared with Rs661.9 million in the first quarter of 2025.

This represents an increase of roughly 123% year-on-year. Basic and diluted earnings per share also improved to Rs0.97, from Rs0.44 a year earlier.

The results indicate that the company was able to generate considerably stronger earnings even with slightly lower revenue, primarily reflecting the improvement in its gross and operating margins.

Changes in Financial Position

Lotte Chemical Pakistan’s total assets stood at Rs37.54 billion as of March 31, 2026, compared with Rs47.80 billion at the end of December 2025. Current assets declined during the quarter, with cash and bank balances falling to Rs443.5 million from Rs6.83 billion at year-end.

The company’s equity stood at Rs17.44 billion at the end of March. The reduction from Rs23.53 billion at December 31, 2025 was largely influenced by the interim dividend of Rs5 per share, amounting to approximately Rs7.57 billion, declared for the year ended December 31, 2025.

Cash Flow Reflects Dividend Payment

The company reported Rs2.68 billion in net cash used in operating activities during the quarter. Capital expenditure amounted to Rs279.3 million.

Financing activities included a significant Rs7.55 billion dividend payment, while the company also received Rs5.11 billion in proceeds from long-term borrowing. Overall, cash and cash equivalents decreased by Rs6.37 billion, ending the quarter at Rs1.88 billion.

Outlook

Lotte Chemical Pakistan’s first-quarter results present a mixed picture on the surface: revenue declined modestly, but profitability improved dramatically. The sharp rise in gross profit and operating profit demonstrates the importance of cost control and margins in the company’s financial performance.

With profit after tax more than doubling year-on-year, the first quarter of 2026 represents a significantly stronger start to the year from a profitability perspective. Investors will now be watching whether the company can maintain these improved margins and translate them into sustained earnings growth over the remaining quarters of 2026