Lotte Chemical Pakistan PAT up by 60% YoY

Lotte Chemical Pakistan Limited (LOTCHEM) announced its 1QCY22 financial result today where the company posted a profit after tax (PAT) of PKR 2,615mn (EPS: PKR 1.73), up by 60% YoY compared to PKR 1,639mn (EPS: PKR 1.08) during SPLY. On a QoQ basis, earnings were up by 85%.

Result Highlights

  • During 1QCY22, net sales went up by 39% YoY to PKR 20.3bn due to 35% YoY rise in PTA prices.
  • During 1QCY22, the company attained a gross profit margin of 19.7% compared to 15.4% during SPLY. The increase in margins was witnessed due to higher realized PTA margins, we view.
  • The company booked finance cost of PKR 277mn during 1QCY22 compared to finance income of PKR 98mn in the same quarter last year. Rise in finance cost is owed to recognition of an exchange loss during the quarter.
  • Other income increased by 35% YoY to PKR 376mn during 1QCY22 due to higher level of short term investments and higher interest rates.

Recommendation

· Currently, we have a “HOLD” call on the stock with a Dec’22 TP of PKR 18.5/share. After announcement of 1QCY22, we revise upwards our earnings estimates for CY22 to PKR 3.53/share from PKR 2.39/share earlier.

Courtesy – AHL Research

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