LyondellBasell Reports First Quarter 2018 Earnings
HOUSTON and LONDON, April 27, 2018 /PRNewswire/ -- First Quarter 2018 Highlights
Comparisons with the prior quarter and first quarter 2017 are available in the following table:
LyondellBasell Industries (NYSE: LYB) today announced net income for the first quarter 2018 of $1.2 billion, or $3.11 per share. First quarter 2018 EBITDA was $1.9 billion. "We started 2018 with strong operations, capturing higher margins for several of our products and advancing our organic and inorganic growth programs. EBITDA improved by 11% relative to the fourth quarter and by 18% relative to the first quarter 2017. Global polyolefins demand remained solid. While U.S. ethylene prices weakened, a tight market for polyolefins supported a polyethylene price increase and strong chain margins. Our Intermediates and Derivatives business achieved record quarterly EBITDA for the segment, driven primarily by higher margins, while our reliability initiatives at the Houston refinery resulted in strong operations during the first quarter," said Bob Patel, LyondellBasell CEO. "In February we announced our agreement to acquire A. Schulman, Inc., a leading global supplier of high-performance plastic compounds and composites. This acquisition builds upon our existing compounding business and will create value for our shareholders and customers while also providing a platform for future growth. In March we launched our recycled polyolefins joint venture, Quality Circular Polymers (QCP), with SUEZ which allows us to contribute to the circular economy in a way that no plastics company has before," said Patel. OUTLOOK LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT Olefins & Polyolefins - Americas (O&P-Americas) – Our O&P–Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
Three months ended March 31, 2018 versus three months ended December 31, 2017 – EBITDA decreased $4 million versus the fourth quarter 2017. Fourth quarter 2017 results included a last-in, first-out (LIFO) inventory charge of $22 million. Compared to the prior period, olefins results decreased approximately $75 million. Ethylene margin declined by approximately 2 cents per pound and volume decreased due to reduced derivative operating rates. Combined polyolefins results improved approximately $35 million primarily due to an increase in the polyethylene spread over ethylene. Joint venture equity income increased by $8 million. Three months ended March 31, 2018 versus three months ended March 31, 2017 – EBITDA increased $57 million versus the first quarter 2017. First quarter 2017 included a $31 million gain on the sale of property in Lake Charles, Louisiana. Compared to the prior period, olefins results decreased by approximately $70 million primarily due to lower volumes. Combined polyolefins results increased by approximately $155 million driven by polyethylene and polypropylene spread improvements of approximately 11 cents per pound and 5 cents per pound, respectively. Olefins & Polyolefins - Europe, Asia, International (O&P-EAI) – Our O&P–EAI segment produces and markets olefins and co-products, polyethylene and polypropylene, including polypropylene compounds.
Three months ended March 31, 2018 versus three months ended December 31, 2017 – EBITDA increased by $162 million versus the fourth quarter 2017. Fourth quarter 2017 results included a LIFO inventory charge of $20 million and a pension charge of $20 million. Compared to the prior period, olefins results increased approximately $70 million. Ethylene margin improved by approximately 6 cents per pound and volume increased due to the absence of fourth quarter maintenance at the Wesseling site. Combined polyolefins results increased approximately $50 million primarily due to higher volumes. Joint venture equity income improved by $7 million. Three months ended March 31, 2018 versus three months ended March 31, 2017 – EBITDA decreased by $11 million versus the first quarter 2017. The first quarter 2018 was favorably impacted by approximately $65 million due to an increase in the euro versus the U.S. dollar exchange rate relative to first quarter 2017. Compared to the prior period, olefins and combined polyolefins results declined by approximately $20 million and $60 million, respectively, primarily due to lower margins. Joint venture equity income improved by $10 million. Intermediates & Derivatives (I&D) – Our I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
Three months ended March 31, 2018 versus three months ended December 31, 2017 – EBITDA increased $76 million versus the fourth quarter 2017. Fourth quarter 2017 results included a LIFO inventory charge of $17 million. Compared to the prior period, PO and derivatives results were relatively unchanged. In intermediate chemicals, an improvement of approximately $30 million was driven by higher styrene margins partially offset by lower methanol volume. Oxyfuels and related products results improved approximately $20 million primarily due to higher margins. Three months ended March 31, 2018 versus three months ended March 31, 2017 – EBITDA increased $147 million versus the first quarter 2017. Results for first quarter 2017 included charges of approximately $40 million related to precious metal catalysts. Compared to the prior period, PO and derivatives results improved by approximately $55 million primarily due to higher margins. In intermediate chemicals, an improvement of approximately $15 million was driven by increased margins partially offset by reduced methanol volumes. Oxyfuels and related products improved by approximately $40 million primarily due to higher oxyfuels margins. Refining – The primary products of this segment include gasoline and distillates, including diesel fuel, heating oil and jet fuel.
Three months ended March 31, 2018 versus three months ended December 31, 2017 – EBITDA decreased $41 million versus the fourth quarter 2017. Fourth quarter 2017 results included a LIFO benefit of $38 million. The Houston refinery operated at 252,000 barrels per day, 7,000 barrels per day more than the prior period. Three months ended March 31, 2018 versus three months ended March 31, 2017 – EBITDA increased $93 million versus the first quarter 2017. Crude throughput increased by 59,000 barrels per day. Yields and volumes improved with the absence of maintenance downtime that occurred on the fluid catalytic cracker and crude units during the first quarter 2017. Technology Segment – Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Three months ended March 31, 2018 versus three months ended December 31, 2017 – EBITDA decreased by $12 million versus the fourth quarter 2017 primarily due to a decline in catalyst sales and licensing revenue. Three months ended March 31, 2018 versus three months ended March 31, 2017 – EBITDA decreased by $4 million versus the first quarter 2017. Capital Spending and Cash Balances Reconciliations and Additional Information CONFERENCE CALL The toll-free dial-in number in the U.S. is 800-475-8402. A complete listing of toll-free numbers by country is available at www.LyondellBasell.com/teleconference for international callers. The pass code for all numbers is 6934553. The slides and webcast that accompany the call will be available at http://www.LyondellBasell.com/earnings. A replay of the call will be available from 1:30 p.m. EDT April 27 until May 27 at 9:59 a.m. EDT. The replay dial-in numbers are 866-403-7099 (U.S.) and +1 203-369-0571 (international). The pass code for each is 65468. ABOUT LYONDELLBASELL FORWARD-LOOKING STATEMENTS INFORMATION RELATED TO FINANCIAL MEASURES EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & 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. Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 7 at the end of this release. Additional operating and financial information, including reconciliations of non-GAAP measures, may be found on our website at www.LyondellBasell.com/investorrelations. OTHER FINANCIAL MEASURE PRESENTATION NOTES 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.
SOURCE LyondellBasell Industries For further information: Media Contact: David Rosen, +1 713-309-7575 or Investor Contact: David Kinney, +1 713-309-7141
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