April 20, 2026 (MLN): Lotte Chemical Pakistan Limited (PSX: LOTCHEM) reported a stellar financial performance for the first quarter ended March 31, 2026, with its net profit surging 2.2 folds to Rs1.47bn, up from Rs661.9m in the corresponding period last year.

Reflecting this massive bottom-line expansion, the company's earnings per share (EPS) more than doubled, reaching Rs0.97 compared to Rs0.44 in Q1 2025.

Interestingly, this phenomenal profit growth was not driven by higher sales volumes, but rather by massive improvements in core cost efficiencies.

LOTCHEM's top-line actually experienced a slight 3% dip, with net revenue from contracts with customers falling to Rs20.86bn from Rs21.51bn.

However, the cost of sales dropped at a much sharper rate of 11%, falling to Rs17.93bn from Rs20.17bn. This significant cost reduction completely transformed the company's margins, causing gross profit to skyrocket to Rs2.93bn compared to Rs1.33bn in the prior year.

On the operating front, overheads were a mixed bag. Distribution and selling expenses remained flat at Rs48.29m, while administrative and general expenses grew 11% to Rs223.46m.

The company did face a significant 125% spike in "other expenses," which rose to Rs182.63m from Rs81.21m. Despite the rise in these secondary costs, the sheer power of the gross margin expansion drove operating profit up by a massive 147% to Rs2.47bn from Rs1bn last year.

Below the operating line, the company faced some minor headwinds. Other income dropped 49% to Rs105.84m, and finance costs increased by 35% to Rs168.08m.

Despite these downward pressures on non-core items, profit before taxation stood strong at Rs2.41bn, marking an improvement from the Rs1.09bn recorded in Q1 2025.

After absorbing a proportionally heavier taxation expense of Rs936.85m (up 121% year-on-year), LOTCHEM comfortably secured its final net profit of Rs1.47bn.