4Q 2022

Financial Results Briefing

Communications Team
Disclaimer
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WITHOUT THE PRIOR WRITTEN CONSENT OF LCT.

1
FY2022 Overview

Financial Results Cash Position

4Q 2022
Lower revenue of RM 2 bil due
to lower ASP and sales volume.
Lower EBITDA of -RM 284 mil
due to:
• A decline in margin spread.
• Loss from foreign exchange.
• Share of loss from LC USA.
• Partially offset by a reversal of
royalty expense charged in
first half year due to net loss
for the year and a reversal of
write down of inventories to
net realisable value.
FY 2022
Higher revenue of RM 10 bil due
to higher ASP. Net cash position of RM 1.3 bil
Lower EBITDA of -RM 457 mil
due to: • IPO funds fully utilised.
• A decline in margin spread. • Cash and bank balances of RM 1.3 bil.
• Write down of inventories to o Approx. RM 0.6 bil earmarked for LINE Project.
net realisable value. o Balance cash on hand of approx. RM 0.7 bil.
• Loss from foreign exchange.
• Lower share of profit from LC
Rewarded shareholders with a special dividend of 13.98 sen
USA.
per share, amounting to RM 318.4 mil

LINE Project Sustainability

Work progress on schedule and within budget ESG initiatives to tackle climate change and plastic pollution

• Target completion in 2025. • Greenhouse Gas (GHG) emission measurement of scope 1

• Completed equity injection of USD 1.6 bil into LCI. and 2.
• Total production capacity increase 64.7% from 3,568 KTA to • Plan to develop a Carbon Emission Management Roadmap
5,878 KTA. in 2023.
• Embrace LOTTE Chemical Corporation’s “Every Step for
Green” approach.

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Favourable Factors Against Volatile External Environment
Resilient financial position and business model to withstand volatility amidst global uncertainty
Key events
On-going Russia-Ukraine
conflict affected crude oil
price and other energy
prices such as naphtha
Lockdowns in China (reopened
in Jan 2023), Global supply
chain disruption, COVID-19,
Recession fears
Inflationary environment
caused by higher adjustment
of monetary policy
Incoming competition from
other petrochemical players
with higher production
capacity
Action plans to mitigate risks and weather through external factors
• Optimise plant operating rate for profit optimisation
• Turnaround activities completed
• Maintain long term collaboration with reliable suppliers
• LCT has a strong presence in Southeast Asia to divert sales to other regions, backed by our diversified and stable
customer portfolio across Malaysia, Indonesia and other Southeast Asia countries
• To explore or realign on new growing market segment
• LCT has a healthy balance sheet with net cash position of RM 1.3 billion and NA of RM 5.17
• With LINE Project’s funding structure of approximately 40% equity and 60% debt, the equity injection has been
completed.
• Production flexibility in accordance to customers’ demand and market requirement
• On-going research and development to produce new products and target niche markets
• Increase domestic term sales via leveraging on our supply consistency, shorter delivery lead time and technical support
• Enhance product quality
• Build strong relationship with customers via regular engagement, partnership for new products and consistent supply
3
Manufacturing Performance – Production Volume & Operating Rate
Optimising production and economic efficiencies in view of volatility of external factors Unit: KTA

Operating Rate %
M’sia: M’sia:
Statutory Statutory
turnaround turnaround
88% 86% 88%
85% 84% 85%
81% 82%
76% 77%
73%
69% 80%

2,921 3,008
776 765 787 2,744
746 718 320
680 82 661 329
84 79 98 618 361
75 80
93
90

692 686 705 2,592 2,688

605 648 638 2,383
528 568

Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 2020 2021 2022 2023
Malaysia Indonesia

Barring unforeseen circumstances and taking into consideration business optimisation,

operating rate guidance for FY 2023: 80% - 85%. This guidance may change from time to time.

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Income Statement – 4Q & 12M FY2022
Higher full year revenue on higher ASP but facing a decline in margin spread Unit: RM mil
4Q 4Q YoY 12M 12M YoY
FY22 FY21 Change % FY22 FY21 Change %
Sales Revenue 2,068.0 2,684.6 -23.0% 10,019.1 9,830.9 +1.9%

Sales Volume (KMT) 428 532 -19.5% 1,860 1,987 -6.4%

EBITDA/(LBITDA) -284.1 175.2 > -100.0% -457.1 1,647.4 > -100.0%

EBITDA/(LBITDA) Margin (%) -13.7% 6.5% -20.2%P -4.6% 16.8% -21.4%P

Net Profit/(Loss) -326.0 168.0 > -100.0% -728.6 1,040.9 > -100.0%

Net Profit/(Loss) Margin (%) -15.8% 6.3% -22.1%P -7.1% 10.6% -17.7%P

4Q Review 12M Review

• Lower top-line YoY mainly due to decrease in ASP and sales volume.
• Lower bottom-line YoY mainly due to:
o A decline in margin spread amid weakened market demand resulting
from volatile external environment, such as elevated inflation, higher
interest rates and Russia-Ukraine crisis.
o Loss from foreign exchange of RM 34.9 million as compared to loss of
RM 2.1 million.
o Share of loss from associated company, LOTTE Chemical USA Corp. (“LC
USA”) of RM 6.4 million as compared to share of gain of RM 83.2 million.
o Partially offset by a reversal of royalty expense charged in first half year
due to net loss for the year and a reversal of write down of inventories
to net realisable value of RM 15.2 million.
• Higher top-line YoY mainly due to increase in ASP.
• Lower bottom-line YoY mainly due to:
o A decline in margin spread amid weakened market demand resulting
from volatile external environment, such as elevated inflation, higher
interest rates and Russia-Ukraine crisis.
o Increase in write down of inventories to net realisable value by RM 118.5
million.
o Loss from foreign exchange differences of RM 19.5 million as compared
to gain of RM 31.2 million.
o Lower share of profit from LC USA of RM 24.1 million as compared to
share of profit of RM 203.1 million.

5
Segmental Breakdown – 4Q & 12M FY2022
Polyolefins segment remains as the bulk contributor to our revenue Unit: RM mil
4Q 4Q YoY 12M 12M YoY
FY22 FY21 Change % FY22 FY21 Change %
Revenue Breakdown

Polyolefins 1,679.6 2,102.5 -20.1% 7,948.3 7,907.7 +0.6%

Olefins & Derivative 388.5 582.0 -33.3% 2,070.8 1,929.2 +7.3%

EBITDA/(LBITDA) Breakdown

Polyolefins -235.4 108.1 > -100.0% -509.6 1,105.2 > -100%

Olefins & Derivative 1.5 66.6 > -97.8% 55.5 484.0 -88.5%

Polyolefins Review Olefins Review

• Lower 4QFY22 top-line YoY mainly due to decrease in ASP and sales • Lower 4QFY22 top-line YoY mainly due to decrease in ASP and sales
volume while revenue for FY22 was marginally higher YoY volume. Revenue for FY22 increased YoY due to increase in ASP.
• Bottom-line for 4QFY22 and FY22 were lower YoY mainly due to a • Bottom-line for 4QFY22 and FY22 were lower YoY mainly due a
decline in margin spread. decline in margin spread resulting from lower ASP.

6
Healthy Cash Position as at 31 December 2022
Financial resilience

Free Cash Cash per share ► RM 0.31

RM 695.1mil
Balances

Total Deposit,
Bank and Cash
Balances

RM 1.3 billion Unutilised finance income arising

1. from IPO proceeds reserved for ► RM 245.5 mil
LINE Project
LINE
RM 624.9mil
Project

2. Funds earmarked for LINE Project ► RM 379.4 mil

Total Deposit, Bank and Cash Balances

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High NA and Net Cash Per Share as at 31 December 2022
Healthy financial position with net cash of RM 1.3 billion

Net Asset Per Share Deposits, Bank and Cash Balances

4Q FY2022: RM 5.17 4Q FY2022: RM 1.32 bil
4Q FY2021: RM 5.58 4Q FY2021: RM 4.60 bil

Net Cash Per Share Total Borrowings

4Q FY2022: RM 0.58 4Q FY2022: Nil
4Q FY2021: RM 2.02 4Q FY2021: Nil

Share price may not have factored in the following fundamentals:

• Net Asset Per Share of RM 5.17

• Zero borrowings
• Net cash per share of RM 0.58 (RM 0.31 – exclude funds reserved for LINE Project)
• Line Project investment of USD 3.9 billion

8
FY2022 Dividend
Rewarding shareholders through financial resilience

Yield of 9.6% based on

trading price (RM 1.46)
Special Single Tier on the announcement
Dividend of 13.98 date of 24 November
2022
sen per share

Payout of RM 318.4
million

9
Cumulative Cash Flow as at 31 December 2022
Mainly utilised for LINE Project Unit: RM mil

Financing Activities &

Beginning of Period Operating Activities Investing Activities End of Period
Exchange Rate Effect

 Operating activities : Net cash used in operations

 Investing activities
 Financing activities
Mainly for acquisition of property, plant and equipment (PPE) as well as prepayment for construction of plant,
:
offset against funds withdrawal from investment with licensed financial institution
Mainly from proceeds received from additional issuance of ordinary shares by a subsidiary company during the
:
period, offset against dividend paid

NOTE: Part of IPO proceeds placement with FIs was excluded from cash and cash equivalent according to MFRS 107 recognition (read in conjunction with Other explanatory
notes (Part B13) in our Bursa report)

10
IPO Funding Utilisation – 4Q FY2022
LINE project on track for completion Unit: RM mil

Actual Utilisation Utilisation

Use of Proceeds Budgeted Amount Balance
as at 31 Dec 2022 %

LINE Project (Note1) 2,634 2,634 0 100%

TE3 Project 220 220 0 100%

PP3 Project (Note2) 607 607 0 100%

Listing Expenses (Note3) 83 83 0 100%

TOTAL 3,544 3,544 0 100%

Note 1: The funding for LINE Project has been revised from RM 2,588,044,000 to RM 2,634,213,000 due to the excess fund from PP3 project and listing expenses.

Note 2: The PP3 project has been revised from RM 620,000,000 to RM 606,805,000. The excess fund of RM 13,195,000 from PP3 project would be invested in the
LINE Project.

Note 3: The listing expenses has been revised from RM 115,704,000 to RM 82,730,000. The excess fund of RM 32,974,000 from listing expenses would be
invested in the LINE Project.

11
Value Creation Strategies

12
LOTTE Chemical Indonesia New Ethylene (“LINE”) Project
Commenced construction in January 2022 and completion slated for 2025 Unit: KTA

Project Details Integrated Production Facilities & Capacity

Investment Value  USD 3.949 bil (~RM 17 bil) Ethylene Polyethylene Plant (450)
(1,000) *Existing plants in LCTN
Equity Stake  51% LCT : 49% LCC

Debt-Equity Structure  40% Equity & 60% Debt Propylene

Polypropylene (250)
(520)
• Completion of EPC contracts award
Project Status  • Commence construction in 2022
• Project completion expected in 2025 Mixed C4 Butadiene (140)

Naphtha cracker and other related downstream facilities in Merak, Cilegon, Banten Pyrolysis Benzene, Toluene,
Province, Indonesia. Gasoline Xylene (400)

 Expand production capabilities and capacity in Indonesia to

cater the net importing country Indonesia for olefins, polyolefins
Existing and derivative petrochemical products.
Plants
 Provide synergistic benefits to LCT group’s existing business
operations in Indonesia which will reduce feedstock
transportation and logistic costs as well as reduce reliance on
Existing
Land third-parties for EL for production, effectively enhancing our
operation efficiency.
New Acquired
Land
 Full support from the Indonesian government with 100% tax
exemption for 20 years upon commencement of operation.
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LINE Project Financing
Equity injection completed

Source of funding USD’mil %

Cash injection into PT LOTTE Chemical Indonesia (“LCI”) by its shareholders:

 LOTTE Chemical Titan (51% equity interest in LCI) 806 20.4

 LOTTE Chemical Corporation (49% equity interest in LCI) 774 19.6

Total equity financing 1,580 40.0

Debt financing to be undertaken by LCI 2,369 60.0

Total development cost 3,949 100.0

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 Sustainability Strategy
Embedding sustainability, ensuring strong governance and developing human capital

Climate Response Governance Structure

o Greenhouse Gas (“GHG”) o Independent Board Structure
Emission measurement scope o Revised Malaysian Code on Corporate
of 1 and 2 Governance (“MCCG”) Initiatives
o Plan to develop a Carbon o 57% independent non-executive
Emission Management directors
Roadmap (“CEMR”) in 2023 o 43% female directors

Minimizing of Compliance
Environment Impact o Business Ethics and Code of Conduct
o Anti-Bribery & Anti-Corruption Manual
o Plant Enhancement Initiatives o Whistleblowing Policy
o Use of 100% recycling fuel waste such o Data Security Protection
as steam, hydrogen and methane gas
o Waste, Energy, Water, Air Emissions
and Carbon Emissions Management
Risk Management
o Scheduled Waste Reduction Program o Enterprise Risk Management Framework

Human Capital Management Health & Safety Mutual Growth

o Grievance Mechanism o Occupational Health, Safety and Environment
o CSR Programme - PEACE (People,
o Human Capital Development (“OHSE”) Initiatives
Education, Aid, Community, Environment)
o Human Rights & Fair Employment Practice o COVID-19 Safety Plan
o Community Engagement
o Succession Planning and leadership development program o Safety training program
o Performance Appraisal & Reward Policy o In-house Medical Clinics
o Joint Communication Consultation o Elimination/ minimization of potential hazard/
risk at the workplace
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Carbon Emission Management Roadmap

Objective & Goal Statement:

① Establish LCTM GHG emission baseline to indicate company’s status on GHG emission and enable to develop strategies
for carbon neutralization.
② Develop GHG Emission Management Plan for continuous measuring, monitoring and reporting.

Impact Assessment Strategy Verification & Disclosure

 Identify GHG Emission Baseline  Establish long term GHG emission

 Reporting the GHG emission and
reduction goal & target
 Gap Analysis strategic results to stakeholders
 Program Development to achieve
 Development of GHG Inventory the GHG target
Management Plan

16
FY2022 Awards & Recognitions
Governance

Bronze Award for the ASEAN Asset Class award under Industry Excellence Award for
2021 IAR at the 2022 the 2021 ASEAN Corporate Corporate Governance
ARC Awards Governance Scorecard (ACGS) Disclosure at the MSWG-
Awards ASEAN Corporate Governance
Award 2021
Social

Graduate’s Choice Top 5 employers of the

Award (GCA), 2nd year (under the Private
runner-up in the Sector) by the Employees
Chemical category Provident Fund (EPF)

17
Questions and Answers

18
Appendix

20
Historical Financial Performance

Unit: RM mil

FY 2021 FY 2022
Indicators
1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total

Revenue 2,367 2,542 2,237 2,685 9,831 2,759 2,817 2,375 2,068 10,019

Sales Vol. (KMT) 518 494 443 532 1,987 521 472 439 428 1,860

EBITDA 647 585 240 175 1,647 166 -57 -282 -284 -457

Net Profit 441 384 48 168 1,041 102 -149 -356 -326 -729

EPS (Sen) 19 17 2 7 46 5 -6 -16 -14 -31

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Historical Product Price

Unit: USD / MT

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Product
2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022

Ethylene 679 557 748 867 958 990 992 1,094 1,174 1,197 942 905

HDPE 839 761 932 1,003 1,134 1,143 1,129 1,254 1,308 1,297 1,045 984

LDPE 910 835 1,012 1,272 1,506 1,461 1,389 1,599 1,619 1,622 1,268 1,101

PP 983 857 966 1,175 1,399 1,363 1,264 1,357 1,424 1,378 1,119 1,021

Benzene 591 342 391 510 741 980 1,020 943 1,053 1,218 929 783

Butadiene 790 285 528 1,109 846 1,008 1,313 686 1,003 1,395 991 704

Source: Company analysis, Platts, ICIS

22
IR Contact

For any queries on Investor Relations matters,

you can contact the following directly:

Investor Relations
Benjamin Poh
benjaminpoh@lotte.net
Pert Song
pertsong@lotte.net

Lot 29.01, Level 29, 1 Powerhouse,

No. 1, Persiaran Bandar Utama,
Bandar Utama, 47800 Petaling Jaya, Selangor.

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