Lotte Chemical Corp.

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Company Background

Lotte Chemical is a core unit of Lotte group, the fifth-largest conglomerate in South Korea.

In terms of sales, Lotte Chemical ranks behind only LG Chem in the domestic chemical industry. It is one of the world's largest producers of chemical products such as polyethylene and ethylene.

Lotte Chemical began as Honam Petrochemical, which was established in 1976 through technological collaboration between companies including Japan's Mitsui group. Lotte group acquired the business in 1979. Honam became Lotte Chemical in 2012, when its management was integrated with Kp Chemical.

In South Korea, Lotte Chemical has the world's biggest ethylene capacity. Its plants in Yeosu, South Jeolla Province, and Seosan, South Chungcheong Province, each have 1 million-ton production systems.

The company is also expanding its international presence.

In 2018, it plans to open a joint plant with U.S. company Axiall in the state of Louisiana. The facility is to produce ethylene from shale gas. This stands to boost Lotte Chemical's ethylene capacity to 3.7 million tons.

In 2010, the South Korean company acquired Malaysia's Titan Chemicals, now called Lotte Chemical Titan Holding.

Seeking to reduce its heavy reliance on commodity chemicals, Lotte Chemical intends to reinforce its water treatment business. In addition, it has research-and-development programs focused on large-scale battery products, such as energy storage systems.

Business Summary

Lotte Chemical Corp. is engaged in the manufacture of petrochemicals. It operates through the following businesses: Resin products, Basic petrochemicals and Chemicals. The Resin products business provides polyethylene, polypropylene, polycarbonate and functional resin and polyethylene terephthalate. The Basic petrochemicals business includes ethylene oxide, mono ethylene, di ethylene and tri ethylene glycol, methyl methacrylate, ethanolamine, butadiene and samarium. The Chemicals business offers benzene, toluene and mixed xylene. The company was founded on March 16, 1976 and is headquartered in Seoul, South Korea.

Financial Highlights

Dec 2019	KRW	USD
Revenue	15,123.47B	12,968.34M
Gross Profit	1,878.34B	1,610.67M
Operating income	1,105.49B	947.96M
Income before tax	1,063.65B	912.07M
Net income	816,896.52M	700.48M
EBITDA	1,837.06B	1,575.27M
Diluted EPS	20,859.79	17.88
Dividends Per Share	6,700	5.74
Total Assets	20,043.10B	17,331.57M
Total liabilities	5,989.97B	5,179.62M
Total equity	13,204.39B	11,418.04M
Operating cash flow	1,408.91B	1,208.13M
	Currency in KRW	Currency in USD

Historical Data

KRW | USD

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019
Revenue	11,713.33B	13,223.54B	15,874.51B	16,073.06B	15,123.47B
Gross Profit	2,060.10B	3,249.80B	3,775.37B	2,687.41B	1,878.34B
Operating income	1,611.31B	2,545.61B	2,930.11B	1,946.17B	1,105.49B
Income before tax	1,444.77B	2,415.92B	3,084.68B	2,006.18B	1,063.65B
Net income	992,512.35M	1,835.81B	2,243.87B	1,537.08B	816,896.52M
EBITDA	2,098.98B	3,174.76B	3,621.27B	2,631.21B	1,837.06B
Diluted EPS	29,458	54,488	65,625	46,073.67	20,859.79
Dividends Per Share	2,500	4,000	10,500	10,500	6,700
Total Assets	11,467.80B	15,866.83B	19,550.97B	20,799.13B	20,043.10B
Total liabilities	3,912.22B	6,466.01B	7,296.20B	7,254.81B	5,989.97B
Total equity	7,524.75B	9,363.11B	11,489.62B	12,734.71B	13,204.39B
Operating cash flow	2,601.78B	2,680.54B	3,152.43B	1,503.36B	1,408.91B

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019
Revenue	10,349.26M	11,397.74M	14,041.89M	14,604.99M	12,968.34M
Gross Profit	1,820.19M	2,801.09M	3,339.53M	2,441.95M	1,610.67M
Operating income	1,423.66M	2,194.13M	2,591.84M	1,768.41M	947.96M
Income before tax	1,276.52M	2,082.35M	2,728.57M	1,822.94M	912.07M
Net income	876.92M	1,582.33M	1,984.83M	1,396.69M	700.48M
EBITDA	1,854.54M	2,736.41M	3,203.22M	2,390.88M	1,575.27M
Diluted EPS	26.02	46.96	58.04	41.86	17.88
Dividends Per Share	2.20	3.44	9.28	9.54	5.74
Total Assets	9,780.22M	13,136.97M	18,262.54M	18,640.56M	17,331.57M
Total liabilities	3,336.50M	5,353.54M	6,815.37M	6,501.89M	5,179.62M
Total equity	6,417.42M	7,752.20M	10,732.45M	11,413.08M	11,418.04M
Operating cash flow	2,298.79M	2,310.43M	2,788.50M	1,366.05M	1,208.13M

Valuation Measures

Dec 2019
PER	10.73
ROA	4.00%
ROE	6.29%
Operating margin	7.30%
Profit margin	5.40%

Key executives

Co-Chief Executive Officer & Director: Byung-Yeon Lim
Co-Chief Executive Officer & Director: Gyo-Hyeon Kim
Co-Chief Executive Officer & Director: Dong-Bin Shin
Managing Director & Head-Global Operations: Seung-Wook Seo
Senior Managing Director & Head-Research: Gyeong-Bo Kang

Shareholders

LOTTE Holdings Co., Ltd. (29.2%)
Lotte Corp. (24.0%)
National Pension Service of Korea (9.7%)
Eastspring Investments (Singapore) Ltd. (1.6%)
The Vanguard Group, Inc. (1.2%)
BlackRock Fund Advisors (1.1%)
Norges Bank Investment Management (0.7%)
Dimensional Fund Advisors LP (0.7%)
HOTEL LOTTE Co., Ltd. (0.7%)
Samsung Asset Management Co., Ltd. (0.5%)

Contact Details

Website:http://www.lottechem.com
Address: 14-16/F, Lotte World Tower, 300 Olympic-ro, Seoul, 05551, South Korea
Phone: +82.2.829.4114

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Competitors

LyondellBasell Industries NV
LG Chem Ltd.
Total SA
Korea Petro Chemical Ind. Co., Ltd.
TK Chemical Corporation
Hanwha Corp
Indorama Ventures Public Co. Ltd.
Formosa Chemicals & Fibre Corporation
Sumitomo Chemical Co., Ltd.
Covestro AG
Trinseo SA
Lion Chemtech Co., Ltd.
Zhejiang Jiahua Energy Chemical Industry Co. Ltd. Class A
Samyang Corporation
Sewoo Global Co., Ltd

Last Updated on 1 Jul, 2020