KARACHI:Â LOTTE Chemical Pakistan Limited (PSX: LOTTE) has announced a significant downturn in its profitability for the first nine months of 2025, with after-tax profit falling by nearly 70% compared to the same period last year, according to a company filing sent to the Pakistan Stock Exchange (PSX) on Tuesday.
The company’s Board of Directors, in a meeting held on October 29, approved the unaudited financial results for the quarter and nine-month period ended September 30, 2025. The board did not recommend any cash dividend, bonus shares, right shares, or other corporate actions.
For the nine-month period, the company posted a profit after taxation of Rs 835.87 million, a stark decrease from the Rs 2.66 billion earned in the corresponding period of 2024. This translates to earnings per share (EPS) of Rs 0.55, down from Rs 1.76 last year.
The primary driver behind this decline was a substantial drop in revenue, which fell to Rs 60.54 billion from Rs 88.98 billion in the same period last year—a decrease of approximately 32%. While the cost of sales also decreased, it was not enough to prevent a more than 50% contraction in gross profit, which stood at Rs 2.35 billion compared to Rs 5.03 billion in 2024.
The company’s performance in the third quarter (July to September) alone mirrored this challenging trend. Quarterly profit after tax plummeted to Rs 94.08 million (EPS: Rs 0.06) from Rs 494.94 million (EPS: Rs 0.33) in the same quarter of 2024.
The Statement of Financial Position as of September 30, 2025, reveals a notable decline in the company’s cash reserves. Cash and bank balances fell sharply to Rs 2.43 billion from Rs 8.83 billion at the end of December 2024.
This is further corroborated by the statement of cash flows, which shows a net cash outflow from operating activities of Rs 5.40 billion for the nine-month period. This is a severe reversal from the net cash generation of Rs 3.92 billion seen in the same period last year. The company cited a significant outflow of Rs 1.35 billion in taxes paid and a substantial use of cash in operations as key reasons.
Despite the profit decline, the company’s equity increased to Rs 23.25 billion from Rs 22.41 billion at the start of the year, primarily due to the retention of earnings.
The results highlight the significant pressures facing the chemical sector, potentially linked to broader economic challenges, including reduced demand, higher input costs, or pricing pressures in the market. The dramatic reduction in cash generated from operations will be a key area for investor attention as it impacts the company’s liquidity and capacity for future investments or dividends. Since the announcement of the results, the stock price of Lotte Chemical Pakistan has dropped by almost 4%, mimicking a broader market trend of selling.
