What drove LYB's second quarter 2024 earnings?

Net income was $924 million, or $2.82 per diluted share. Excluding identified items, net income was $734 million, or $2.24 per share. The main identified item was a $293 million pre-tax gain on the sale of the EO&D business, partly offset by $42 million of pre-tax refinery exit costs. Management attributed sequential improvement to higher production, improving seasonal demand, and better integrated margins in North America and Europe, and record oxyfuels volumes in Intermediates & Derivatives.

How much cash did LYB generate and how did it use it?

Cash from operating activities was $1.3 billion. The company invested $484 million in capital expenditures and returned $513 million to shareholders through $438 million in common dividends and $75 million in share repurchases. It also divested the EO&D business for $700 million and invested approximately $500 million to acquire a 35% stake in NATPET.

What is LYB's liquidity and balance sheet position?

At June 30, 2024, the company had $2,864 million in cash and cash equivalents and restricted cash, and total liquidity of $7,014 million. Total liquidity included $3,250 million of availability under the Senior Revolving Credit Facility and $900 million under the U.S. Receivables Facility. Management described the balance sheet as robust and investment grade.

What is the outlook for LYB's third quarter 2024?

Management expects margins to continue benefiting from low natural gas and NGL costs in North American and Middle East production, relative to higher oil-based costs elsewhere. Oxyfuels margins are expected to remain above historical levels. Planned average operating rates are 85% for North American olefins and polyolefins assets, 80% for European O&P assets, and 75% for Intermediates & Derivatives assets.

What is the status of LYB's European assets and refining business?

LYB announced a strategic review of some of its European assets to strengthen profitability and competitive advantage in the region. Refining segment EBITDA was $(7) million in Q2 2024, down from $55 million in Q1 2024, as margins declined with the Maya 2-1-1 crack spread. The Houston Refinery operated at 93% utilization, and the company continues its planned exit from refining.

LYB 8-K: Earnings & Results

01—Abstract

Summary

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

LyondellBasell Industries N.V.

(NYSE: LYB) reported second quarter 2024 net income of $924 million^a, or $2.82 per diluted share, and $734 million, or $2.24 per diluted share, excluding identified items. Second quarter EBITDA was $1.6 billion ($1,644 million), or $1.4 billion ($1,373 million) excluding identified items. The results included a $293 million pre-tax gain on the sale of the Ethylene Oxide and Derivatives (EO&D) business, partly offset by $42 million of pre-tax refinery exit costs.

Sales and other operating revenues were $10.56 billion^b, and cash from operating activities was $1.3 billion. The company invested $484 million in capital expenditures and returned $513 million to shareholders through dividends and share repurchases, and it increased its quarterly dividend by 7% to $1.34 per share. Management cited higher production, improving seasonal demand, and better integrated margins in North America and Europe, with Intermediates & Derivatives delivering record quarterly oxyfuels volumes.

Refining margins fell sequentially on lower crack spreads. Liquidity stood at $7.0 billion^c at June 30, 2024, including $2.9 billion in cash and short-term investments. The company also completed the acquisition of a 35% share in the NATPET polypropylene joint venture in Saudi Arabia for approximately $500 million and announced a strategic review of certain European assets.

For the third quarter 2024, LYB expects margins to benefit from low North American and Middle East natural gas and NGL costs, with oxyfuels margins above historical levels. Expected average operating rates are 85%^d for North American olefins and polyolefins assets, 80% for European O&P assets, and 75% for Intermediates & Derivatives assets.

02—Key points

Key Highlights

Net income of $924 million ($2.82 diluted EPS) for Q2 2024, or $734 million ($2.24 per share) excluding identified items, versus $473 million in Q1 2024 and $715 million in Q2 2023.
EBITDA of $1,644 million, or $1,373 million excluding identified items, compared with $1,047 million in Q1 2024 and $1,383 million in Q2 2023.
A $293 million pre-tax gain on the sale of the EO&D business, recorded in the Intermediates & Derivatives segment, was the main identified item benefiting results.
Cash from operating activities of $1.3 billion and capital expenditures of $484 million, with $513 million returned to shareholders through $438 million in dividends and $75 million in share repurchases.
Quarterly dividend increased by 7% to $1.34 per share, and total liquidity of $7,014 million at June 30, 2024.
Acquired a 35% stake in the NATPET polypropylene joint venture in Saudi Arabia for approximately $500 million; NATPET is progressing toward a final investment decision to more than double its polymer capacity.
Announced a strategic review of certain European assets; Refining segment EBITDA was $(7) million, reflecting lower crack spreads and the ongoing Houston Refinery exit.

03—Questions

Frequently Asked Questions

What drove LYB's second quarter 2024 earnings?
Net income was $924 million, or $2.82 per diluted share. Excluding identified items, net income was $734 million, or $2.24 per share. The main identified item was a $293 million pre-tax gain on the sale of the EO&D business, partly offset by $42 million of pre-tax refinery exit costs. Management attributed sequential improvement to higher production, improving seasonal demand, and better integrated margins in North America and Europe, and record oxyfuels volumes in Intermediates & Derivatives.
How much cash did LYB generate and how did it use it?
Cash from operating activities was $1.3 billion. The company invested $484 million in capital expenditures and returned $513 million to shareholders through $438 million in common dividends and $75 million in share repurchases. It also divested the EO&D business for $700 million and invested approximately $500 million to acquire a 35% stake in NATPET.
What is LYB's liquidity and balance sheet position?
At June 30, 2024, the company had $2,864 million in cash and cash equivalents and restricted cash, and total liquidity of $7,014 million. Total liquidity included $3,250 million of availability under the Senior Revolving Credit Facility and $900 million under the U.S. Receivables Facility. Management described the balance sheet as robust and investment grade.
What is the outlook for LYB's third quarter 2024?
Management expects margins to continue benefiting from low natural gas and NGL costs in North American and Middle East production, relative to higher oil-based costs elsewhere. Oxyfuels margins are expected to remain above historical levels. Planned average operating rates are 85% for North American olefins and polyolefins assets, 80% for European O&P assets, and 75% for Intermediates & Derivatives assets.
What is the status of LYB's European assets and refining business?
LYB announced a strategic review of some of its European assets to strengthen profitability and competitive advantage in the region. Refining segment EBITDA was $(7) million in Q2 2024, down from $55 million in Q1 2024, as margins declined with the Maya 2-1-1 crack spread. The Houston Refinery operated at 93% utilization, and the company continues its planned exit from refining.

04—Continue

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