LyondellBasell Reports Second Quarter 2024 Earnings
LyondellBasell (NYSE: LYB) reported second quarter 2024 earnings with net income of $924 million, or $2.82 per diluted share. Excluding identified items, net income was $734 million, or $2.24 per share. EBITDA reached $1.6 billion, or $1.4 billion excluding identified items. The company generated $1.3 billion in cash from operating activities and returned $513 million to shareholders through dividends and share repurchases. LYB completed the divestment of its Ethylene Oxide and Derivatives business and acquired a 35% share in NATPET integrated polypropylene joint venture in Saudi Arabia. The company also announced a strategic review of European assets to strengthen profitability and competitive advantage in the region.
LyondellBasell (NYSE: LYB) ha riportato i risultati del secondo trimestre 2024 con un utile netto di 924 milioni di dollari, ovvero 2,82 dollari per azione diluita. Escludendo gli elementi identificati, l'utile netto è stato di 734 milioni di dollari, pari a 2,24 dollari per azione. EBITDA ha raggiunto 1,6 miliardi di dollari, o 1,4 miliardi di dollari escludendo gli elementi identificati. L’azienda ha generato 1,3 miliardi di dollari di liquidità dalle attività operative e ha restituito 513 milioni di dollari agli azionisti attraverso dividendi e riacquisti di azioni. LYB ha completato la cessione della sua attività di ossido di etilene e derivati e ha acquisito una quota del 35% in una joint venture integrata di polipropilene NATPET in Arabia Saudita. L'azienda ha anche annunciato una revisione strategica delle attività europee per rafforzare la redditività e il vantaggio competitivo nella regione.
LyondellBasell (NYSE: LYB) anunció los resultados del segundo trimestre de 2024 con un ingreso neto de 924 millones de dólares, o 2.82 dólares por acción diluida. Excluyendo los elementos identificados, el ingreso neto fue de 734 millones de dólares, o 2.24 dólares por acción. EBITDA alcanzó 1.6 mil millones de dólares, o 1.4 mil millones de dólares excluyendo los elementos identificados. La compañía generó 1.3 mil millones de dólares en efectivo a partir de actividades operativas y devolvió 513 millones de dólares a los accionistas a través de dividendos y recompras de acciones. LYB completó la desinversión de su negocio de óxido de etileno y derivados y adquirió una participación del 35% en la empresa conjunta de polipropileno integrada NATPET en Arabia Saudita. La empresa también anunció una revisión estratégica de sus activos europeos para fortalecer la rentabilidad y la ventaja competitiva en la región.
LyondellBasell (NYSE: LYB)는 2024년 2분기 실적을 보고하며 순이익 9억 2400만 달러를 기록하였고, 희석 주당 2.82 달러로 나타났습니다. 확인된 항목을 제외한 순이익은 7억 3400만 달러, 즉 주당 2.24 달러였습니다. EBITDA는 16억 달러에 도달했으며, 확인된 항목을 제외하면 14억 달러입니다. 회사는 운영 활동에서 13억 달러의 현금을 생성했으며, 5억 1300만 달러를 배당금과 자사주 매입을 통해 주주에게 환원했습니다. LYB는 에틸렌 옥사이드 및 파생상품 사업 매각을 완료하고 사우디아라비아의 NATPET 통합 폴리프로필렌 합작회사에서 35%의 지분을 인수했습니다. 또한 회사는 지역 내 수익성 및 경쟁 우위를 강화하기 위해 유럽 자산에 대한 전략적 검토를 발표했습니다.
LyondellBasell (NYSE: LYB) a publié ses résultats du deuxième trimestre 2024 avec un bénéfice net de 924 millions de dollars, soit 2,82 dollars par action diluée. En excluant les éléments identifiés, le bénéfice net s'élevait à 734 millions de dollars, soit 2,24 dollars par action. L'EBITDA a atteint 1,6 milliard de dollars, ou 1,4 milliard de dollars en excluant les éléments identifiés. L'entreprise a généré 1,3 milliard de dollars de liquidités provenant des activités d'exploitation et a restitué 513 millions de dollars aux actionnaires sous forme de dividendes et de rachat d'actions. LYB a achevé la cession de son activité d'oxyde d'éthylène et de dérivés et a acquis une participation de 35 % dans la co-entreprise intégrée de polypropylène NATPET en Arabie Saoudite. L'entreprise a également annoncé un examen stratégique de ses actifs européens pour renforcer la rentabilité et l'avantage concurrentiel dans la région.
LyondellBasell (NYSE: LYB) hat die Ergebnisse des zweiten Quartals 2024 veröffentlicht und einen Nettogewinn von 924 Millionen Dollar erzielt, was 2,82 Dollar pro verwässerter Aktie entspricht. Ohne identifizierte Posten lag der Nettogewinn bei 734 Millionen Dollar, oder 2,24 Dollar pro Aktie. Das EBITDA erreichte 1,6 Milliarden Dollar, bzw. 1,4 Milliarden Dollar ohne identifizierte Posten. Das Unternehmen erwirtschaftete 1,3 Milliarden Dollar an liquiden Mitteln aus operativen Tätigkeiten und stellte 513 Millionen Dollar den Aktionären durch Dividenden und Aktienrückkäufe zur Verfügung. LYB hat die Veräußerung seines Ethylenoxid- und Derivategeschäfts abgeschlossen und eine 35%ige Beteiligung an dem integrierten Polypropylen-Joint Venture NATPET in Saudi-Arabien erworben. Das Unternehmen kündigte außerdem eine strategische Überprüfung seiner europäischen Vermögenswerte an, um die Rentabilität und den Wettbewerbsvorteil in der Region zu stärken.
- Net income increased to $924 million, up from $473 million in the previous quarter
- EBITDA rose to $1.6 billion from $1.047 billion in the previous quarter
- Cash from operating activities reached $1.3 billion
- Quarterly dividend increased by 7% to $1.34 per share
- Completed divestment of Ethylene Oxide and Derivatives business for $700 million
- Acquired 35% stake in NATPET joint venture in Saudi Arabia for approximately $500 million
- Refining margins fell sequentially due to lower crack spreads
- Incurred costs related to plans to exit the refining business
Insights
LyondellBasell's Q2 2024 results demonstrate a robust financial performance, with net income reaching
Key financial highlights include:
- A
7% increase in quarterly dividend to$1.34 per share, signaling confidence in future cash flows. $513 million returned to shareholders through dividends and share repurchases, maintaining a shareholder-friendly capital allocation strategy.- Strong cash generation with
$1.3 billion in cash from operating activities, indicating healthy cash conversion. - A robust balance sheet with
$2.9 billion in cash and short-term investments and$7.0 billion in available liquidity.
The company's strategic moves, including the divestment of the EO&D business for
While the refining segment faced headwinds due to lower crack spreads, the overall business benefited from increased production and improving seasonal demand. The record quarterly oxyfuels volumes and expanded integrated polyethylene margins in Europe are particularly noteworthy.
Looking ahead, the company's outlook remains cautiously optimistic, with expectations of continued benefits from low natural gas and NGL costs in North America and the Middle East. The projected operating rates of
LyondellBasell's Q2 2024 results offer valuable insights into broader market trends and the company's strategic positioning. The reported
The company's strategic focus on growing and upgrading its core businesses aligns well with these market trends. The acquisition of a
The announced strategic review of European assets reflects the challenges faced by petrochemical companies in the region, including high energy costs and increasing regulatory pressures. This proactive approach to repositioning the European business for a "more sustainable and circular future" indicates LyondellBasell's commitment to adapting to evolving market dynamics and regulatory landscapes.
The company's outlook on minimal capacity additions in North America over the next several years, coupled with strong demand growth, suggests a potentially favorable supply-demand balance. This could support pricing power and margins for well-positioned players like LyondellBasell.
Lastly, the emphasis on developing more sustainable products aligns with growing consumer and regulatory pressure for environmentally friendly solutions. This focus could be a key differentiator and growth driver for LyondellBasell in the coming years, particularly as sustainability becomes an increasingly important factor in customer purchasing decisions across various end-markets.
Second Quarter 2024 Highlights
- Net income:
$924 million $734 million - Diluted earnings per share:
$2.82 $2.24 - EBITDA:
$1.6 billion $1.4 billion - Cash from operating activities:
$1.3 billion - Increased quarterly dividend by
7% to$1.34 - Returned
$513 million - Taking additional actions to grow and upgrade our core businesses
- Completed divestment of Ethylene Oxide and Derivatives (EO&D) business
- Completed acquisition of
35% share in NATPET integrated polypropylene joint venture inSaudi Arabia - Announced strategic review of European assets
Comparisons with the prior quarter and second quarter 2023 are available in the following table:
Table 1 - Earnings Summary | |||||||
Millions of | Three Months Ended | Six Months Ended | |||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||
Sales and other operating revenues | |||||||
Net income | 924 | 473 | 715 | 1,397 | 1,189 | ||
Diluted earnings per share | 2.82 | 1.44 | 2.18 | 4.25 | 3.62 | ||
Weighted average diluted share count | 326 | 326 | 326 | 326 | 327 | ||
EBITDA(a) | 1,644 | 1,047 | 1,383 | 2,691 | 2,514 | ||
Excluding Identified Items(a) | |||||||
Net income excluding identified items | |||||||
Diluted earnings per share excluding identified items | 2.24 | 1.53 | 2.44 | 3.76 | 4.94 | ||
Gain on sale of business, pre-tax | (293) | — | — | (293) | — | ||
Impairments, pre-tax | — | — | — | — | 252 | ||
Refinery exit costs, pre-tax | 42 | 36 | 111 | 78 | 235 | ||
EBITDA excluding identified items | 1,373 | 1,063 | 1,450 | 2,436 | 2,902 | ||
(a) | See "Information Related to Financial Measures" for a discussion of the company's use of non-GAAP financial measures and Tables 2-6 for reconciliations or calculations of these financial measures. "Identified items" include adjustments for lower of cost or market ("LCM"), gain on sale of business, impairments and refinery exit costs. |
LyondellBasell Industries (NYSE: LYB) (the "company") today announced net income for the second quarter 2024 of
Second quarter volumes benefited from increased production and improving seasonal demand. In North America, olefins and polyolefins volumes increased while favorable ethane and natural gas costs continued to provide support for integrated margins. In Europe, integrated polyethylene margins expanded with increased utilization of advantaged LPG feedstocks. The company's Intermediates and Derivatives segment delivered record quarterly oxyfuels volumes driven by production from LYB's newest PO/TBA asset. Intermediate chemical margins and volumes improved, largely due to higher production from LYB's acetyls assets. Refining margins fell sequentially due to lower crack spreads.
In the second quarter, the company's strong cash conversion(b) resulted in
LYB continues to take actions to grow and upgrade its core businesses. In the second quarter, the company divested the EO&D business for
"Increased production from LYB's assets, higher integrated margins and rising seasonal demand drove sequential improvements in second quarter profitability. Underlying business results increased by nearly 30 percent over the first quarter. We continue to make significant strides on our ambitions to grow and upgrade our core businesses as part of our three-pillar strategy to unlock value. In the second quarter, we completed the divestiture of a non-core asset, increased our cost-advantaged footprint in the
OUTLOOK
In the third quarter, the company expects margins to continue to benefit from low costs for natural gas and natural gas liquids utilized in LYB's North American and
"We are confident that our actions to grow and upgrade our core businesses will deliver lasting benefits for LYB. June year-to-date market demand for polyethylene and polypropylene produced in
(b) | Cash conversion is net cash provided by operating activities divided by EBITDA excluding LCM, gain on sale of business and impairment. |
CONFERENCE CALL
LYB will host a conference call August 2 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Peter Vanacker, Executive Vice President and Chief Financial Officer Michael McMurray, Executive Vice President of Global Olefins and Polyolefins and Refining Kim Foley, Executive Vice President of Intermediates and Derivatives Aaron Ledet, Executive Vice President of Advanced Polymer Solutions Torkel Rhenman and Head of Investor Relations David Kinney. For event access, the toll-free dial-in number is 1-877-407-8029, international dial-in number is 201-689-8029 or click the CallMe link. The slides and webcast that accompany the call will be available at www.LyondellBasell.com/earnings. A replay of the call will be available from 1:00 p.m. ET August 2 until September 2, 2024. The replay toll-free dial-in numbers are 1-877-660-6853 and 201-612-7415. The access ID for each is 13743073.
ABOUT LYONDELLBASELL
We are LyondellBasell (NYSE: LYB) – a leader in the global chemical industry creating solutions for everyday sustainable living. Through advanced technology and focused investments, we are enabling a circular and low carbon economy. Across all we do, we aim to unlock value for our customers, investors and society. As one of the world's largest producers of polymers and a leader in polyolefin technologies, we develop, manufacture and market high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare. For more information, please visit www.LyondellBasell.com or follow @LyondellBasell on LinkedIn.
FORWARD-LOOKING STATEMENTS
The statements in this release relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this release, the words "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, market conditions, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; our ability to successfully implement initiatives identified pursuant to our Value Enhancement Program and generate anticipated earnings; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to manage costs; future financial and operating results; our ability to align our assets and grow and upgrade our core, including the results of our strategic review of certain European assets; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; our ability to meet our sustainability goals, including the ability to operate safely, increase production of recycled and renewable-based polymers to meet our targets and forecasts, and reduce our emissions and achieve net zero emissions by the time set in our goals; our ability to procure energy from renewable sources; our ability to build a profitable Circular & Low Carbon Solutions business; the continued operation of and successful shut down and closure of the Houston Refinery, including within the expected timeframe; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and to repay our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2023, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made. LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change, except as required by law.
This release contains time sensitive information that is accurate only as of the date hereof. Information contained in this release is unaudited and is subject to change.
We undertake no obligation to update the information presented herein except as required by law.
INFORMATION RELATED TO FINANCIAL MEASURES
This release makes reference to certain non-GAAP financial measures as defined in Regulation G of the
We report our financial results in accordance with
We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation and amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity. We also present EBITDA, net income and diluted EPS exclusive of identified items. Identified items include adjustments for "lower of cost or market" ("LCM"), gain on sale of business, impairments and refinery exit costs. Our inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Fluctuation in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods, within the same fiscal year as the charge, as market prices recover. A gain or loss on sale of a business is calculated as the consideration received from the sale less its carrying value. Property, plant and equipment are recorded at historical costs. If it is determined that an asset or asset group's undiscounted future cash flows will not be sufficient to recover the carrying amount, an impairment charge is recognized to write the asset down to its estimated fair value. Goodwill is tested for impairment annually in the fourth quarter or whenever events or changes in circumstances indicate that the fair value of a reporting unit with goodwill is below its carrying amount. If it is determined that the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge is recognized. We assess our equity investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. If the decline in value is considered to be other than temporary the investment is written down to its estimated fair value. In April 2022 we announced our decision to cease operation of our Houston Refinery. In connection with exiting the refinery business, we began to incur costs primarily consisting of accelerated lease amortization costs, personnel related costs, accretion of asset retirement obligations and depreciation of asset retirement costs.
Cash conversion is a measure commonly used by investors to evaluate liquidity. Cash conversion means net cash provided by operating activities divided by EBITDA excluding LCM, gain on sale of business and impairment. We believe cash conversion is an important financial metric as it helps management and other parties determine how efficiently the company is converting earnings into cash.
These non-GAAP financial measures as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated. In addition, we include calculations for certain other financial measures to facilitate understanding. This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change.
LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.
Additional operating and financial information may be found on our website at www.LyondellBasell.com/investorrelations.
Table 2 - Reconciliations of Net Income to Net Income Excluding Identified Items and to EBITDA Including and Excluding Identified Items | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
Millions of | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
Net income | $ 924 | $ 473 | $ 715 | $ 1,397 | $ 1,189 | ||||||
Identified items | |||||||||||
less: Gain on sale of business, pre-tax(a) | (293) | — | — | (293) | — | ||||||
add: Impairments, pre-tax(b) | — | — | — | — | 252 | ||||||
add: Refinery exit costs, pre-tax(c) | 42 | 36 | 111 | 78 | 235 | ||||||
add: Provision for (benefit from) income taxes related to identified items | 61 | (8) | (25) | 53 | (53) | ||||||
Net income excluding identified items | $ 734 | $ 501 | $ 801 | $ 1,235 | $ 1,623 | ||||||
Net income | $ 924 | $ 473 | $ 715 | $ 1,397 | $ 1,189 | ||||||
Loss from discontinued operations, net of tax | 1 | 1 | 2 | 2 | 3 | ||||||
Income from continuing operations | 925 | 474 | 717 | 1,399 | 1,192 | ||||||
Provision for income taxes | 249 | 122 | 188 | 371 | 355 | ||||||
Depreciation and amortization(d) | 387 | 365 | 391 | 752 | 787 | ||||||
Interest expense, net | 83 | 86 | 87 | 169 | 180 | ||||||
EBITDA | 1,644 | 1,047 | 1,383 | 2,691 | 2,514 | ||||||
Identified items | |||||||||||
less: Gain on sale of business(a) | (293) | — | — | (293) | — | ||||||
add: Impairments(b) | — | — | — | — | 252 | ||||||
add: Refinery exit costs(e) | 22 | 16 | 67 | 38 | 136 | ||||||
EBITDA excluding identified items | $ 1,373 | $ 1,063 | $ 1,450 | $ 2,436 | $ 2,902 | ||||||
(a) | In the second quarter of 2024, we sold our |
(b) | The six months ended June 30, 2023 reflects a non-cash goodwill impairment charge in our Advanced Polymer Solutions segment. |
(c) | Refinery exit costs include accelerated lease amortization costs, personnel related costs, accretion of asset retirement obligations and depreciation of asset retirement costs. See Table 6 for additional detail on refinery exit costs. |
(d) | Depreciation and amortization includes depreciation of asset retirement costs in connection with exiting the Refining business. See Table 6 for additional detail on refinery exit costs. |
(e) | Refinery exit costs include accelerated lease amortization costs, personnel related costs and accretion of asset retirement obligations. See Table 6 for additional detail on refinery exit costs. |
Table 3 - Reconciliation of Diluted EPS to Diluted EPS Excluding Identified Items | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
Diluted earnings per share | $ 2.82 | $ 1.44 | $ 2.18 | $ 4.25 | $ 3.62 | |||||
Identified items | ||||||||||
less: Gain on sale of business | (0.68) | — | — | (0.68) | — | |||||
add: Impairments | — | — | — | — | 0.77 | |||||
add: Refinery exit costs | 0.10 | 0.09 | 0.26 | 0.19 | 0.55 | |||||
Diluted earnings per share excluding identified items | $ 2.24 | $ 1.53 | $ 2.44 | $ 3.76 | $ 4.94 | |||||
Table 4 - Calculation of Cash and Liquid Investments and Total Liquidity | ||||||||||
Millions of | June 30, | |||||||||
Cash and cash equivalents and restricted cash | $ 2,864 | |||||||||
Short-term investments | — | |||||||||
Cash and liquid investments | $ 2,864 | |||||||||
add: | ||||||||||
Availability under Senior Revolving Credit Facility | 3,250 | |||||||||
Availability under | 900 | |||||||||
Total liquidity | $ 7,014 | |||||||||
Table 5 - Calculation of Dividends and Share Repurchases | ||||||||||
Three Months Ended | ||||||||||
Millions of | June 30, 2024 | |||||||||
Dividends - common stock | $ 438 | |||||||||
Repurchase of Company ordinary shares | 75 | |||||||||
Dividends and share repurchases | $ 513 | |||||||||
Table 6 - Refinery Exit Costs | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
Millions of | June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
Refinery exit costs: | ||||||||||
Accelerated lease amortization costs | $ 10 | $ 8 | $ 38 | $ 18 | $ 89 | |||||
Personnel costs | 10 | 6 | 27 | 16 | 43 | |||||
Asset retirement obligation accretion | 2 | 2 | 2 | 4 | 4 | |||||
Asset retirement cost depreciation | 20 | 20 | 44 | 40 | 99 | |||||
Total refinery exits costs | $ 42 | $ 36 | $ 111 | $ 78 | $ 235 | |||||
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SOURCE LyondellBasell
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