LyondellBasell Q3 2024 Financial Report: Net Profit of $573 Million, but Specific Projects Lead to a $0.13 Decrease in Earnings Per Share

LyondellBasell announced its financial results for the third quarter of 2024, reporting net income of $573 million, or $1.75 per diluted share. During the quarter, the Company recognized $44 million (after-tax) of specific items that impacted earnings per share by $0.13 related to costs associated with exiting the refining business. In addition, EBITDA for the third quarter was $1.2 billion.

In North America, consolidated polyethylene margins improved, thanks to favorable conditions for ethane and natural gas costs and higher polyethylene prices. Compared to the same period in 2023, the North American polyethylene and polypropylene market demand increased by more than 7% and 4%, respectively. Sales in the third quarter benefited from high operating rates of crackers, which improved margins on commercial ethylene sales. In the olefin and polyolefin business in Europe, Asia and other regions, consolidated polyethylene margins also increased due to lower feedstock costs and stable polyolefin prices. However, due to the decline in crude oil prices and the widening of gasoline cracking spreads, pure oxygen fuel and refining margins declined sequentially.

In the third quarter of 2024, Lyondell generated $670 million in cash flow from operating activities and achieved a cash conversion rate of approximately 80% over the past twelve months. The Company continued to execute a prudent capital allocation strategy, of which $368 million was used for capital expenditures and $479 million was returned to shareholders through dividends and share repurchases. At the end of the quarter, the Company held $2.6 billion in cash and short-term investments and $7.3 billion in available working capital to support the Company's solid investment rating in the capital markets.

Lyondell Basell continues to make progress in building a profitable cycle and low-carbon solutions business, one of the three pillars of the company's long-term strategy. During the quarter, the company started construction of its first commercial-scale plant with MoReTec-1, a proprietary and differentiated catalytic advanced recycling technology, in Wetherling, Germany. The facility is expected to begin operations in 2026 and aims to achieve a high plastic-to-plastic conversion rate, supporting Lyander Basell's goal of producing and selling at least 2 million tonnes of polymers based on recycled and renewable raw materials per year by 2030. In addition, the electrification of MoReTec-1 enables it to operate on renewable electricity to reduce greenhouse gas (GHG) emissions. In September, the company signed a new renewable power purchase agreement in the Netherlands, exceeding its target of generating at least 50% of its electricity from renewable sources by 2030.

Peter Vanacker, Chief Executive Officer of LyondellBasell, said: "In the third quarter, the company broke ground on its new MoReTec-1 facility in Germany, an important milestone in the company's journey towards a more sustainable future. The company's investment shows that a lot of work is being done to lead the industry's transition to a circular economy. The company is building a competitive advantage to provide sustainable, low-carbon solutions that meet growing demand, while strengthening the company's position in the global market."

In the fourth quarter, the company expects year-end seasonality to result in weaker demand across most of its businesses. Sequential increases in natural gas and ethane feedstock costs are expected to reduce margins in the North American integrated polyolefin business in the fourth quarter. With lower gasoline cracking spreads and the end of the summer driving season, pure oxygen fuel and refining margins are expected to continue to decline. The Company expects operating rates in the fourth quarter to be in line with global demand and the company's maintenance schedule, with operating rates of 85% for its North American olefins and polyolefins (O&P) assets, 60% for its European O&P assets, and 75% for its intermediates and derivatives (I&D) assets. Lower interest rates in 2025 are expected to boost demand for durable goods, benefiting the company's polypropylene and I&D businesses.

In addition, Peter Vanacker said, "Despite challenging global macroeconomic conditions, the company's strong operations in North America have enabled the company to take full advantage of favorable ethylene margins in the region. The company's focus on operational and commercial excellence allows us to seize opportunities and meet customer needs while making progress on our long-term strategy to drive sustainable value growth."