LyondellBasell Reports Second Quarter 2018 Earnings
HOUSTON and LONDON, Aug. 3, 2018 /PRNewswire/ -- Second Quarter 2018 Highlights
Comparisons with the prior quarter and second quarter 2017 are available in the following table: Table 1 - Earnings Summary
LyondellBasell Industries (NYSE: LYB) today announced net income for the second quarter 2018 of $1.7 billion, or $4.22 per share. The quarter included a $346 million non-cash benefit from the settlement of prior-year tax positions that increased earnings by $0.88 per share. Second quarter 2018 EBITDA was $2.0 billion. "LyondellBasell remains focused on delivering shareholder value with outstanding performance from our diverse global business portfolio and the advancement of our growth initiatives during the second quarter. EBITDA increased by 5% relative to the first quarter of 2018 with improvements in 3 of our 5 business segments. Both our Intermediates and Derivatives segment and our Technology segment achieved record quarterly EBITDA. High operating rates enabled us to benefit from strong global demand and margin improvements. In the U.S., a tight market supported strong polyethylene margins despite the addition of new industry capacity. Additionally, our team at the Houston refinery continued to operate with high reliability and captured improved refining margins," said Bob Patel, LyondellBasell CEO. "During the second quarter we reached significant milestones on our value-driven growth programs. In June, our acquisition of A. Schulman was approved by their shareholders and several regulatory agencies. Additionally, we entered into exclusive discussions with Odebrecht S.A. regarding a potential transaction with Braskem. Our organic growth program continued to advance with our U.S. Gulf Coast capacity additions of polyethylene and propylene oxide proceeding on schedule. We are also expanding our joint venture portfolio with a new plant in South Korea which will add 400 kilotons of polypropylene capacity to serve rapidly-growing markets in Asia utilizing LyondellBasell's industry-leading Spheripol technology," 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. Table 2 - O&P-Americas Financial Overview
Three months ended June 30, 2018 versus three months ended March 31, 2018 - EBITDA decreased $80 million versus the first quarter 2018. Compared with the prior period, olefins results decreased approximately $175 million. Ethylene margin declined by approximately 7 cents per pound partially offset by volume which increased due to improved derivative operating rates. Combined polyolefins results improved approximately $105 million primarily due to an increase of 7 cents per pound in the polyethylene spread over ethylene. Three months ended June 30, 2018 versus three months ended June 30, 2017 - EBITDA decreased $159 million versus the second quarter 2017. Compared with the prior period, olefins results decreased by approximately $345 million primarily due to a decline of 12 cents per pound in ethylene margin. Polyethylene results increased by approximately $180 million driven by an improvement of 13 cents per pound in the polyethylene spread over ethylene. Joint venture equity income increased by $4 million. 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. Table 3 - O&P-EAI Financial Overview
Three months ended June 30, 2018 versus three months ended March 31, 2018 - EBITDA decreased by $71 million versus the first quarter 2018. Compared with the prior period, olefins results decreased approximately $15 million. Combined polyolefins results decreased approximately $40 million primarily due to declines in polyethylene spread over ethylene and polypropylene volumes. Joint venture equity income decreased by $22 million. Three months ended June 30, 2018 versus three months ended June 30, 2017 - EBITDA decreased by $252 million versus the second quarter 2017. Compared with the prior period, olefins results decreased approximately $145 million primarily due to a decrease in margin as a result of increased feedstock costs. Combined polyolefins results decreased approximately $80 million primarily due to declines in polyolefin spreads which were partially offset by increased sales volumes. Joint venture equity income decreased by $13 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. Table 4 - I&D Financial Overview
Three months ended June 30, 2018 versus three months ended March 31, 2018 - EBITDA increased $156 million versus the first quarter 2018 resulting in a quarterly record. Compared with the prior period, PO and derivatives results were relatively unchanged. Intermediate chemicals results increased approximately $110 million, driven by both volume and margin improvements across all major products. Acetyls sales volumes increased by 53% over the first quarter due to less maintenance downtime. Styrene margin improved by 3 cents per pound due to tight markets driven by high levels of industry downtime. Oxyfuels and related products results increased approximately $45 million due to seasonal improvements in oxyfuels margins and volumes. Three months ended June 30, 2018 versus three months ended June 30, 2017 - EBITDA increased $303 million versus the second quarter 2017. Compared with the prior period, PO and derivatives results increased by approximately $70 million as margins improved and volumes increased with the absence of planned maintenance which occurred in the second quarter of 2017 at our plant in Botlek, the Netherlands. Intermediate chemicals results increased approximately $155 million driven by a margin improvement in all businesses. Oxyfuels and related products increased by approximately $85 million primarily due to higher margins. Refining - Our Refining segment produces and markets gasoline and distillates, including diesel fuel, heating oil and jet fuel. Table 5 - Refining Financial Overview
Three months ended June 30, 2018 versus three months ended March 31, 2018 - EBITDA increased $41 million versus the first quarter 2018. The Maya 2-1-1 industry benchmark crack spread increased by $5.22 per barrel to $25.94 per barrel primarily due to a strong gasoline crack and Maya crude discounts. The Houston refinery operated at 259,000 barrels per day, 7,000 barrels per day more than the prior period. Three months ended June 30, 2018 versus three months ended June 30, 2017 - EBITDA increased $79 million versus the second quarter 2017. The Maya 2-1-1 crack spread increased by $6.40 per barrel and crude throughput decreased by 6,000 barrels per day. Technology - Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts. Table 6 - Technology Financial Overview
Three months ended June 30, 2018 versus three months ended March 31, 2018 - EBITDA increased by $57 million versus the first quarter 2018 resulting in a quarterly record. The increase was driven by higher licensing income as revenues from several new licenses, primarily in China, were recognized. Three months ended June 30, 2018 versus three months ended June 30, 2017 - EBITDA increased by $65 million versus the second quarter 2017 primarily due to an increase in licensing revenue. 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 August 3 until September 27 at 12:59 a.m. EDT. The replay dial-in numbers are 866-483-9089 (U.S.) and +1 203-369-1588 (international). The pass code for each is 3564. 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
SOURCE LyondellBasell Industries For further information: Media Contact: David Rosen +1 713-309-7575, Investor Contact: David Kinney +1 713-309-7141
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