KARACHI: Lotte Chemical Pakistan Limited (PSX: LOTCHEM) reported a sharp increase in profitability during the first quarter ended March 31, 2026, with net profit more than doubling year-on-year despite lower sales and production volumes amid a challenging operating environment.
The company posted a net profit of Rs1.47 billion for the quarter, compared with Rs662 million in the corresponding period last year. Earnings per share (EPS) improved to Rs0.97, up from Rs0.44 in the first quarter of 2025.
Revenue for the quarter stood at Rs20.86 billion, slightly lower than Rs21.51 billion recorded a year earlier. However, the company’s gross profit surged 120% to Rs2.93 billion, reflecting improved margins despite subdued market conditions. Operating profit also rose significantly to Rs2.47 billion, compared with Rs1.0 billion in the same period last year.
According to the directors’ review, domestic sales volume declined 16% year-on-year to 83,604 tonnes, primarily due to elevated inventories across the polyester value chain and increased availability of lower-priced imported products. Production also fell 16% to 97,462 tonnes, aligning output with reduced market demand.
The company noted that international crude oil and paraxylene (PX) markets experienced considerable volatility during the quarter, driven by geopolitical tensions in the Middle East and disruptions to global supply chains. Rising feedstock prices influenced PTA pricing, although producers faced challenges in passing on higher costs to downstream customers.
Lotte Chemical Pakistan stated that the domestic polyester and PTA industry continued to face pressure from weak demand, inflation, high energy costs, and the influx of cheaper imports. Nevertheless, inventory gains on lower-cost products helped improve profitability across the value chain during the quarter.
Looking ahead, the company expects crude oil and petrochemical markets to remain volatile due to ongoing geopolitical uncertainty. Management also anticipates continued supply chain challenges and cautious buying behavior from downstream industries as higher raw material and logistics costs weigh on demand.
Despite these headwinds, Lotte Chemical Pakistan said it remains focused on cost efficiency, operational excellence, and inventory management, expressing confidence in its ability to navigate the challenging business environment while strengthening its long-term performance.
