01—Abstract
Summary
Summary of the 10-Q filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.
LyondellBasell Industries N.V. reported second-quarter 2024 net income attributable to Company shareholders of $923 milliona, or $2.82 per diluted share, compared with $714 million, or $2.18 per share, in the second quarter of 2023.
Revenues rose to $10.558 billionb from $10.306 billion, while operating income fell slightly to $970 million from $1,011 million. The quarter's bottom line was boosted by a $293 million pre-tax gain on the sale of the Ethylene Oxide & Derivatives (EO&D) business, which sold for $700 million in May 2024. Management said second-quarter results improved from the first quarter of 2024, driven by higher volumes and improved olefins and oxyfuels results, while Refining margins fell on lower crack spreads.
For the first six months of 2024, operating cash flow was $1.234 billionc, down from $1.772 billion a year earlier, as working capital used $566 million. Capital expenditures rose to $967 million from $653 million. The company paid $846 million in dividends and $75 million for share repurchases.
It acquired a 35% interest in Saudi Arabia-based NATPET for approximately $500 milliond. Cash and cash equivalents totaled $2.839 billion at June 30, 2024, and total debt, including current maturities, was $11.190 billion. In July 2024, the senior unsecured revolving credit facility was increased from $3.25 billion to $3.75 billion and extended to July 2029.
The filing also discloses a strategic review of certain European assets and a planned exit from the Houston refinery business, with cumulative exit costs of $599 million to date and an estimated total of $560 million to $1,000 million. For the third quarter of 2024, management expects margins to benefit from low natural gas and natural gas liquids costs in North America and the Middle East, and plans average operating rates of 85% for O&P-Americas, 80% for O&P-EAI and 75% for I&D.
02—Key points
Key Highlights
- Second-quarter 2024 net income attributable to Company shareholders was $923 million ($2.82 per diluted share), up from $714 million ($2.18 per share) in the second quarter of 2023.
- Revenues were $10.558 billion in the second quarter of 2024 versus $10.306 billion a year earlier, while operating income was $970 million versus $1,011 million.
- A $293 million pre-tax gain on the May 2024 sale of the EO&D business (proceeds of $700 million) was recognized in the Intermediates and Derivatives segment.
- Operating cash flow for the first six months of 2024 was $1.234 billion, down from $1.772 billion, and capital expenditures increased to $967 million from $653 million.
- Shareholder returns in the first six months totaled $921 million, including $846 million of dividends and $75 million of share repurchases; the long-term target is returning 70% of free cash flow.
- Refining segment EBITDA was a loss of $7 million in the second quarter, with the Maya 2-1-1 crack spread at $29.13 per barrel, and the Houston refinery exit has cumulative costs of $599 million.
- Liquidity included $2.839 billion of cash and $4.150 billion of total unused credit facility availability at June 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, LyondellBasell Industries kept $0.11.
- Revenue$8.68B100.0%
- Cost of revenue−$7.24B83.5%
- Gross profit$1.43B16.5%
- Operating costs−$435.0M5.0%
- Operating income$999.0M11.5%
- Interest, other & tax−$75.0M0.9%
- Net income$924.0M10.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 2, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $8.68B$10.31B | −15.8% |
| Cost of Revenue | $7.24B$8.87B | −18.3% |
| Gross Profit | $1.43B$1.44B | −0.3% |
| R&D Expenses | $33.00M$32.00M | +3.1% |
| SG&A Expenses | $402.00M$395.00M | +1.8% |
| Operating Expenses | $7.68B$9.29B | −17.4% |
| Operating Income | $999.00M$1.01B | −1.2% |
| Net Income | $924.00M$715.00M | +29.2% |
| EPS (Basic) | $2.82$2.18 | +29.4% |
| EPS (Diluted) | $2.82$2.18 | +29.4% |
05—Questions
Frequently Asked Questions
Why did net income rise sharply in the second quarter of 2024 even though operating income declined?
Net income attributable to Company shareholders increased to $923 million from $714 million, mainly because of a $293 million pre-tax gain on the sale of the EO&D business. Operating income itself decreased to $970 million from $1,011 million, and interest expense, income taxes and losses from equity investments also weighed on results.
What acquisitions and divestitures did LyondellBasell complete in 2024?
In May 2024, the company sold its U.S. Gulf Coast-based EO&D business and the Bayport, Texas production facilities for $700 million in cash, subject to post-closing working capital adjustments. In the same month, it acquired a 35% interest in Saudi Arabia-based NATPET from Alujain Corporation for approximately $500 million, accounted for under the equity method.
How did the company's cash flow and capital spending change in the first half of 2024?
Net cash provided by operating activities was $1.234 billion, compared with $1.772 billion in the first half of 2023, with working capital using $566 million. Capital expenditures increased to $967 million from $653 million, and the filing states that about 80% of 2024 expenditures supported sustaining maintenance, with the remainder supporting profit-generating growth projects.
What is the company's debt and liquidity position?
Total debt, including current maturities, was $11.190 billion at June 30, 2024, and the company was in compliance with its debt covenants. Unused availability under credit facilities totaled $4.150 billion, including $3.25 billion under the Senior Revolving Credit Facility and $900 million under the U.S. Receivables Facility. In February 2024, the company issued $750 million of 5.5% notes due 2034 and in March repaid $775 million of 5.75% notes due 2024.
What restructuring and strategic actions are underway?
The company is exiting its Houston refinery business, with total costs incurred since the decision of $599 million and an estimate of total exit costs between $560 million and $1,000 million. It also announced a strategic review of some European assets during the quarter to strengthen profitability and competitive advantage in the region, and recorded asset retirement obligations of $264 million related to the refinery exit.
06—Continue