KUALA LUMPUR (Jan 30): Lotte Chemical Titan Holding Bhd (LCTitan) was the third biggest loser on Bursa Malaysia in Tuesday morning trade, after it slumped 12.33% or 18 sen to RM1.28, following its wider net loss for the financial year ended Dec 31, 2023 (FY2023).
The stock was also heavily traded, with 4.75 million shares changing hands, five times its 200-day average trading volume of 880,855 shares.
LCTitan opened 6.84% or 10 sen lower at RM1.36, before declining to an intra-morning low of RM1.28.
The group, which is mainly involved in the manufacture and sales of petrochemical products and polyolefin resins, reported that its net loss for FY2023 expanded to RM780.29 million, from RM731.06 million a year earlier, underpinned by a 23.68% drop in revenue to RM7.65 billion from RM10.19 billion.
“The weaker performance was mainly due to a decline in margin spreads, and share of loss from Lotte Chemical USA Corp, but partially offset by reversal of inventory write-down to its net realisable value,” LCTitan said in a statement on Monday.
For the fourth quarter ended Dec 31, 2023 (4QFY2023), however, net loss almost halved to RM186.48 million or 8.19 sen per share, from RM333.64 million or 14.65 sen per share a year ago.
The improved performance was despite a 10.26% decline in quarterly revenue to RM1.86 billion, from RM2.07 billion, which LCTitan attributed to lower sales volumes, amid slower economic activities in the region.
In a note on Tuesday, TA Securites Holdings Bhd said LCTitan's FY2023 results met its expectations, while exceeding the consensus forecast.
"The group registered a core net loss of RM891.6 million for FY2023 (FY2022: RM606.2 million loss). We forecast a core loss of RM907.1 million, while consensus forecast a loss of RM1.07 billion for FY2023," it said.
The research house said the near-term earnings outlook for the group remains challenging.
"We expect product spreads to continue to languish in the first half ending June 30, 2024 (1HFY2024), given the challenging global economic environment, but should improve in 2HFY2024, on the back of interest rate cuts in the US and stimulus measures in China. We believe LCTitan will continue to face losses in 1QFY2024," it said.
TA Securities kept its "sell" rating and target price of RM1.05 per share for LCTitan.