Lotte Chemical Corporation (011170) Q4 2025 earnings summary

Executive summary

• Full-year 2025 sales declined 7.1% year-over-year to KRW 18.483 trillion, with an operating loss of KRW 943.6 billion, mainly due to delayed recovery in the petrochemical sector and increased losses at Lotte Energy Materials.

• Fourth quarter sales were KRW 4.7099 trillion, with an operating loss of KRW 433.9 billion, reflecting seasonal demand weakness and initial ramp-up costs at LCI.

• Significant asset impairment losses in Q4 led to a net loss of KRW 1.609 trillion.

• Net loss for FY2025 is expected to widen to 2.49 trillion KRW from 1.83 trillion KRW in FY2024.

Financial highlights

• EBITDA loss for Q4 was KRW 69.5 billion.

• FY2025 EBITDA is projected at 376.1 billion KRW, down from 311 billion KRW in FY2024.

• Cash and cash equivalents at Q4 2025 stood at 3.43 trillion KRW, up 17.4% sequentially.

• Loss before tax in Q4 reached KRW 1.7363 trillion, driven by asset impairments.

• As of Q4-end, assets stood at KRW 31 trillion, liabilities at KRW 13 trillion, and shareholder equity at KRW 18 trillion; debt-to-equity ratio was 76.4%.

Outlook and guidance

• Profitability is expected to improve quarter-on-quarter in Basic Chemicals and Advanced Materials as off-peak season ends and operational stability increases.

• Advanced materials and precision chemicals anticipate modest recovery as inventory adjustments end and demand stabilizes.

• Lotte Fine Chemical expects flat profitability in Q1, while Lotte Energy Materials anticipates further improvement from portfolio diversification.

• Ongoing business transformation focuses on reducing commodity petrochemical exposure and expanding high-value and eco-friendly products.