South Korea’s Lotte Chemical Corp. is expected to report strong earnings for the third quarter thanks to rising prices of its mainstay high-value added chemical products and oil price stability running at $40 to $50 a barrel over the past year.

According to market data provider FnGuide on Saturday, Lotte Chemical is estimated to have recorded 763.2 billion won ($676.4 million) in operating profit in the July-September period, up 18.7 percent from 643.2 billion won in the same period last year. Its operating profit margin is expected to reach 20 percent this year. Market analysts believe that capacity expansion with new factories would also boost sales once they go fully operational.

Lotte Chemical is expected to reclaim its top position as the country’s leading chemical firm as its rival LG Chem Ltd.’s operating profit is estimated at 734.2 billion won in the third quarter. The two companies are pitting against each other as LG Chem beat Lotte Chemical in operating profit in the previous quarter.

“Lotte Chemical fares better (than LG Chem) when the chemical market is buoyant like these days as its business portfolio is focused on chemical business,” said an official from the chemical industry.

Lotte Chemical is likely to post profit gains for three consecutive years since 2014 as of the third quarter thanks to the bullish petrochemical industry over the past three years. Its third quarter profit this year is expected to gain more than five times compared to 142.2 billion won in the same period of 2014.

The company is performing stronger than its rivals as its operating profit margin over the first nine-month period is estimated to have stayed at around 20 percent, higher than the industry average of above 10 percent.

As of 1:05 p.m. on Monday, shares of Lotte Chemical rose 1.77 percent to 402,000 won in Seoul trading.

By Moon Il-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]