Lotte Energy Materials (020150) Q4 2024 earnings summary

Executive summary

• Revenue declined in Q4 2024 due to reduced shipments as clients adjusted inventory, leading to lower capacity utilization and market uncertainty.

• Operating profit turned negative in both Q4 and full-year 2024, impacted by higher fixed costs and inventory valuation losses.

Financial highlights

• Q4 2024 revenue was KRW 186 bn, down 21.5% year-over-year and 11.8% quarter-over-quarter.

• Q4 2024 operating loss was KRW -40 bn, with EBITDA at KRW -19 bn and net loss at KRW -45 bn.

• Full-year 2024 revenue reached KRW 902 bn, up 11.5% year-over-year, but operating profit dropped to KRW -64 bn from KRW 12 bn in 2023.

• Gross profit margin fell to 1.3% in Q4 2024, with operating margin at -21.5%.

Outlook and guidance

• Limited shipment recovery expected in 1H 2025 due to weak demand; sales growth anticipated in 2H 2025 as key clients recover and new North American OEMs are added.

• Profitability improvement forecasted for 2025, driven by cost innovation and increased sales of high-value Elecfoil for Al accelerators.