Karachi: LOTCHEM, the sole producer of Purified Terephthalic Acid (PTA) in Pakistan, announced a significant rise in its revenue by 43% for the first nine months of the calendar year 2024, reaching PkR88.9 billion compared to PkR62.1 billion in the same period last year. Despite this increase in topline figures, the company experienced a 45% decline in earnings per share, attributed to increased gas prices impacting the cost of sales.

According to AKD Securities Limited, the decline in earnings per share to PkR1.76 from PkR3.20 in the same period last year is largely due to the substantial rise in gas prices, which has increased the company's cost of sales. LOTCHEM's production process requires approximately 6-7 million British thermal units (mmbtu) of gas to produce one ton of PTA. The company currently receives a continuous gas supply, consisting of 24% Re-gasified Liquefied Natural Gas (RLNG) and 76% indigenous gas.

LOTCHEM, with an annual production capacity of 500,000 tons of PTA, plays a crucial role in supporting Pakistan's textile and packaging industries. The company anticipates that PTA demand in the country will remain stable at around 700,000 tons for the current calendar year, with LOTCHEM capable of meeting approximately 70% of this demand. Novatex Limited significantly influences LOTCHEM's revenue, accounting for 40% of total sales.

The company is actively managing its working capital and aims to maintain its dividend distribution in line with previous years. Additionally, LOTCHEM is engaging with the government and the Federal Board of Revenue (FBR) to claim a tax refund of PkR4.1 billion, which pertains to the previous and current fiscal years.

Despite challenges such as rising energy prices and lower core-delta margins, the company remains optimistic. It expects a recovery in demand driven by improvements in textile and other manufacturing sectors, which could positively impact medium-term prospects.