PETALING JAYA: Lotte Chemical Titan Holding Bhd is concerned about rising global crude oil prices, as its naphtha feedstock correlates with the crude oil outlook.

       The group is the country’s first and largest integrated producer of olefins and polyolefins, and one of the largest polyolefins producers in South-East Asia.

       “We are cautiously optimistic on the petrochemical market outlook with some balancing market factors weighing on the sector.

       “In addition, there are new additional domestic capacity expected to come online this year, which will potentially have downward pressure on product prices.

       “On the other hand, stable demand with the easing of lockdown measures, coupled with freight constraints and regional supply disruptions, would lead to firm footing for the overall product prices,” said group president and CEO Park Hyun Chul in a statement.

       For its fourth quarter ended Dec 31, 2021, the group noted that profit from operations was lower at RM35.6mil from RM102.2mil in the preceding quarter.

       This was due to margin compression amid the increase in its naphtha feedstock costs relative to product average selling prices (ASPs) in the fourth quarter of financial year 2021 (FY21).

       “Given that naphtha price trend tracks closely with Brent crude oil price, it has been staging strong upward momentum in the fourth quarter, in line with Brent crude market outlook on global demand recovery,” it said.

       For the full year, the group posted a net profit of RM1.06bil, which was a close to seven-fold surge, from RM154mil a year earlier.

       Revenue jumped 42.4% year-on-year to RM9.83bil, from RM6.9bil a year earlier.