How did LyondellBasell perform in the fourth quarter of 2023?

The company reported net income of $185 million, or $0.56 per diluted share, and EBITDA of $639 million. Excluding identified items, net income was $411 million ($1.26 per share) and EBITDA was $910 million. Sales and other operating revenues were $9.929 billion, down from $10.625 billion in the third quarter of 2023.

What were the identified items that affected results?

Identified items include lower of cost or market (LCM) inventory adjustments, impairments and refinery exit costs. In Q4 2023, impairments were $241 million pre-tax, including $192 million related to Dutch PO/SM joint venture assets in the Intermediates & Derivatives segment, and refinery exit costs were $50 million pre-tax. For full year 2023, impairments totaled $518 million, including a $252 million non-cash goodwill impairment in Advanced Polymer Solutions.

What portfolio and strategic actions did the company announce?

The company announced the divestiture of its Ethylene Oxide and Derivatives business for $700 million and a final investment decision to build its first commercial-scale catalytic advanced recycling plant using MoReTec technology. As a subsequent event, it agreed to acquire 35% of NATPET, a Saudi Arabian PDH/PP joint venture, for $500 million. The strategy targets $3 billion of incremental Normalized EBITDA by 2027.

What is the outlook for the first quarter of 2024?

The company expects seasonally slow demand and economic uncertainty to remain headwinds for most businesses. Relatively low ethane costs continue to benefit North American Olefins & Polyolefins margins, and oxyfuels and refining margins are expected to be within typical winter seasonal ranges. It plans operating rates of approximately 80% for Olefins & Polyolefins Americas assets and 75% for both Olefins & Polyolefins EAI and Intermediates & Derivatives assets.

How strong is the company's cash generation and shareholder return?

The company generated $4.9 billion in cash from operating activities in 2023 and $1.5 billion in the fourth quarter. It reinvested approximately $1.5 billion through capital expenditures and returned $1.8 billion to shareholders through dividends ($1.6 billion) and share repurchases ($211 million). Year-end total liquidity was $7.555 billion, and the company issued an inaugural $500 million green bond during the year.

LYB 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 2, 2024. Cited figures are marked; the original filing is the authoritative source.

LyondellBasell Industries N.V.

(NYSE: LYB) reported fourth-quarter 2023 net income of $185 million^a, or $0.56 per diluted share, and $411 million, or $1.26 per share, excluding identified items (LCM inventory adjustments, impairments and refinery exit costs). Fourth-quarter EBITDA was $639 million, or $910 million excluding identified items. Cash generated from operating activities was $1.5 billion, resulting in a 171% cash conversion rate.

For full year 2023, net income was $2.1 billion^b ($6.46 per share), or $2.8 billion ($8.65 per share) excluding identified items, with EBITDA of $4.5 billion and $5.2 billion excluding identified items. Operating cash flow for the year was $4.9 billion, with 98% cash conversion. The company also returned $1.8 billion to shareholders through dividends and share repurchases in 2023.

The company highlighted portfolio actions, including the announced divestiture of its Ethylene Oxide and Derivatives business for $700 million^c, a final investment decision to build a commercial-scale catalytic advanced recycling plant using its MoReTec technology, and a subsequent agreement to acquire a 35% stake in NATPET, a Saudi Arabian PDH/PP joint venture, for $500 million. Management cited a Value Enhancement Program with a 2023 year-end run rate of more than $300 million of net income and $400 million of recurring annual EBITDA. Liquidity at year-end was $7.6 billion.

For the first quarter of 2024, the company expects seasonally slow demand and economic uncertainty to remain headwinds for most businesses, while low ethane costs continue to benefit North American Olefins & Polyolefins margins. It expects oxyfuels and refining margins within typical winter seasonal ranges, and plans operating rates of approximately 80%^d for Olefins & Polyolefins Americas assets, 75% for Olefins & Polyolefins EAI assets and 75% for Intermediates & Derivatives assets.

02—Key points

Key Highlights

Q4 2023 net income of $185 million ($0.56 per diluted share); $411 million ($1.26 per share) excluding identified items
Q4 2023 EBITDA of $639 million, or $910 million excluding identified items; full year 2023 EBITDA of $4.5 billion, or $5.2 billion excluding identified items
Operating cash flow of $1.5 billion in Q4 2023 (171% cash conversion) and $4.9 billion for full year 2023 (98% cash conversion)
Full year 2023 net income of $2.1 billion ($6.46 per share), or $2.8 billion ($8.65 per share) excluding identified items, versus $3.9 billion in 2022
Announced $700 million divestiture of the Ethylene Oxide and Derivatives business and a $500 million agreement to acquire 35% of NATPET, a Saudi Arabian PDH/PP joint venture
Final investment decision to build a commercial-scale catalytic advanced recycling plant using MoReTec technology
Returned $1.8 billion to shareholders in 2023 through dividends and share repurchases; year-end liquidity of $7.6 billion

03—Questions

Frequently Asked Questions

How did LyondellBasell perform in the fourth quarter of 2023?
The company reported net income of $185 million, or $0.56 per diluted share, and EBITDA of $639 million. Excluding identified items, net income was $411 million ($1.26 per share) and EBITDA was $910 million. Sales and other operating revenues were $9.929 billion, down from $10.625 billion in the third quarter of 2023.
What were the identified items that affected results?
Identified items include lower of cost or market (LCM) inventory adjustments, impairments and refinery exit costs. In Q4 2023, impairments were $241 million pre-tax, including $192 million related to Dutch PO/SM joint venture assets in the Intermediates & Derivatives segment, and refinery exit costs were $50 million pre-tax. For full year 2023, impairments totaled $518 million, including a $252 million non-cash goodwill impairment in Advanced Polymer Solutions.
What portfolio and strategic actions did the company announce?
The company announced the divestiture of its Ethylene Oxide and Derivatives business for $700 million and a final investment decision to build its first commercial-scale catalytic advanced recycling plant using MoReTec technology. As a subsequent event, it agreed to acquire 35% of NATPET, a Saudi Arabian PDH/PP joint venture, for $500 million. The strategy targets $3 billion of incremental Normalized EBITDA by 2027.
What is the outlook for the first quarter of 2024?
The company expects seasonally slow demand and economic uncertainty to remain headwinds for most businesses. Relatively low ethane costs continue to benefit North American Olefins & Polyolefins margins, and oxyfuels and refining margins are expected to be within typical winter seasonal ranges. It plans operating rates of approximately 80% for Olefins & Polyolefins Americas assets and 75% for both Olefins & Polyolefins EAI and Intermediates & Derivatives assets.
How strong is the company's cash generation and shareholder return?
The company generated $4.9 billion in cash from operating activities in 2023 and $1.5 billion in the fourth quarter. It reinvested approximately $1.5 billion through capital expenditures and returned $1.8 billion to shareholders through dividends ($1.6 billion) and share repurchases ($211 million). Year-end total liquidity was $7.555 billion, and the company issued an inaugural $500 million green bond during the year.

04—Continue

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