KUALA LUMPUR (Aug 6): Lotte Chemical Titan Holding Bhd (KL:LCTITAN) sank deeper into the red for the second quarter ended June 30, 2026 (2QFY2026), weighed down by inventory write-downs and higher costs from its new Indonesian petrochemical plant.

Net loss attributable to shareholders widened by 0.6% to RM174.19 million from RM173.09 million a year earlier, while the group's overall net loss more than doubled to RM401.67 million from RM189.33 million.

Revenue, however, surged 116.4% to RM3.11 billion from RM1.44 billion, driven mainly by contributions from the Lotte Chemical Indonesia New Ethylene (LINE) project, which started operations in October 2025, and higher average selling prices.

The increase was partly offset by the weaker US dollar against the ringgit.

In a Bursa filing on Thursday, the petrochemical producer said loss before tax widened to RM395.74 million from RM190.94 million for the quarter mainly due to RM140 million inventory write-downs, weaker demand amid the prolonged US-Iran conflict, and higher depreciation and interest costs from the Lotte Chemical Indonesia New Ethylene (LINE) project.

The impact was partially offset by improved product margins earlier in the quarter, supported by higher product prices, as well as profit contribution from associate Lotte Chemical USA Corp.

Average plant utilisation improved to 50% from 46% a year earlier, supported by additional production from the LINE project, although feedstock constraints arising from restrictions along the Strait of Hormuz during the US-Iran conflict limited operations.

Looking ahead, chairman and CEO Jang Seon Pyo said the group continues to face a challenging operating environment amid geopolitical tensions, macroeconomic uncertainty and persistent supply-demand imbalances in regional petrochemical markets.

"We will closely monitor the geopolitical and market developments, and adapt our operations to achieve our business objectives and meet stakeholders' expectations," he said, adding that the group remains committed to its key markets in Malaysia, Indonesia and Southeast Asia.

Separately, the group said it expects FY2026 operating rates to be around 60% to 65%, barring unforeseen circumstances, while continuing to preserve liquidity, align operating rates with market demand and maintain disciplined cost management.

Net loss for the six-month period narrowed slightly to RM296.9 million, despite revenue nearly doubling to RM5.6 billion from a year ago.

Shares in Lotte Chemical Titan fell 1.5 sen or 4.6% to 31.5 sen at Thursday’s close, valuing the group at RM728.4 million.