Karachi October 23 2021: The demand of the domestic Polyester market is expected to remain healthy as the country continues to recover from the pandemic. However, persistent logistical issues in regional trade may hamper availability of feedstock, restricting local producers from ramping up their operating rates to optimum levels, as per management of Lotte Chemical.
PTA demand is expected to remain weak in the last quarter of 2021 as downstream industries are forced to comply with China’s dual control policy. However, producers are expected to resist a drastic reduction in price as high co-feedstock, Acetic Acid prices are adding pressure to existing near break-even margins.
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Crude Oil (WTI) prices are expected to trend downwards as pressure mounts on OPEC+ to keep the rising prices in check by increasing output. Additionally, we expect the refineries at the Gulf of Mexico to resume normal operations soon which may help stabilize prices. However, continued improvement in global oil demand may restrict any significant downward movement in prices.
Paraxylene (PX) market is expected to remain downbeat as capacity additions in China and Saudi Arabia will further increase supply in the market. Additionally, no foreseeable upside in demand would further weigh on the prices.
Operations
Production volume during the quarter at 122,067 tonnes was 3% lower than the corresponding period last year.
Sales volume, comprising of domestic sales only, for Q3 2021 at 128,949 tonnes was 4% higher than the corresponding quarter last year due to consistent demand from the domestic market.
Financial Performance
Revenue for the quarter was higher than the corresponding period last year mainly due to higher
PTA price. Your Company generated a gross profit of Rs 1,394 million for the quarter as compared to gross profit of Rs 1,340 million during the same period last year.
Distribution and selling expenses were 4% lower than the corresponding quarter last year. Administrative expenses were 12% higher than the corresponding period last year due to overall impact of inflation.
The taxation charge for the quarter is based on statutory income tax rate and tax under Final Tax Regime (FTR) as adjusted by the movement in the deferred tax account.
Earnings per share (EPS) for the quarter stood at Rs 0.41 per share as compared to Rs 0.63 per share for Q3 2020.
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