LyondellBasell Industries N : Reports First Quarter 2020 Earnings
May 04, 2020 at 05:51 am EDT
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HOUSTON - LyondellBasell Industries (NYSE: LYB) today announced net income for the first quarter 2020 of $0.1 billion, or $0.42 per share.
The first quarter 2020 included a $351 million non-cash, inventory valuation charge (LCM) and $13 million of integration costs, net of tax, that impacted earnings by $1.05 per share and $0.04 per share, respectively. First quarter 2020 EBITDA was $0.6 billion, or $1.1 billion excluding LCM. Integration activities related to the 2018 acquisition of A. Schulman are on schedule to achieve $200 million in forward annual run-rate synergies by the close of the third quarter 2020.
'Despite the dual challenges of low oil prices and impacts from the coronavirus pandemic, LyondellBasell delivered resilient results and moved forward on our strategic initiatives during the first quarter. Our two Olefins & Polyolefins segments experienced strong consumer-driven demand for polymers used in packaging and medical products which contributed to higher underlying profitability for the combined segments relative to the prior quarter. We advanced on initiatives to increase our long-term profitability, including successfully beginning production at our 500,000 ton high-density polyethylene plant using our next-generation Hyperzone technology and signing definitive agreements with Bora to build an integrated olefins and polyolefins joint venture,' said Bob Patel, LyondellBasell CEO.
'During March, global initiatives to limit the spread of COVID-19 resulted in falling demand for transportation fuels that sharply reduced margins for our oxyfuels and gasoline produced in the Intermediates & Derivatives and Refining segments. Automotive manufacturing shutdowns diminished typical seasonal improvements for our Advanced Polymer Solutions segment where more than one third of the segment's product volumes are utilized in the automotive sector. In response, we have temporarily halted production at several relatively small plants in our APS segment serving automotive end markets. While our major facilities are all operating, we have appropriately reduced rates across our system to match decreased customer demand.
'We are navigating through these challenging times by finding benefits from our core strengths in operational excellence, cost management and capital discipline. Our significant global feedstock flexibility serves us well during periods of volatile raw material prices. We have taken early, proactive measures to further strengthen our position by maximizing cash generation and reducing expenditures while increasing liquidity to ensure we remain well-positioned through these events,' Patel said.
ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polypropylene compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune magazine's list of the 'World's Most Admired Companies' for the third consecutive year.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; the impacts of the COVID-19 pandemic in geographic regions or markets served us, or where our operations are located, including the risk of prolonged recession; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; any proposed business combination, the expected timetable for completing any proposed transactions and the receipt of any required governmental approvals, future financial and operating results, benefits and synergies of any proposed transactions, future opportunities for the combined company; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the 'Risk Factors' section of our Form 10-K for the year ended December 31, 2019, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.
LyondellBasell Industries N.V. is one of the world's largest chemical groups. Net sales break down by activity as follows:
- production of olefins and polyolefin (50.2%): ethylene, propylene, butadiene, polypropylene components, etc.;
- manufacturing of intermediate chemical products (21.6%): propylene oxide, acetyl, ethanol, ethylene oxide, etc.;
- refining of highly sulfide crude oil (15.6%): activity ensured in the Gulf Coast region of the United States. The group also produces oxy-fuel;
- manufacturing of advanced polymer solutions (11.1%): polypropylene compounds, engineering plastics, composite materials, advanced polymers, etc. ;
- development of chemical and polyolefin process technologies (1.5%). The group also manufactures polyolefin catalysts.
At the end of 2021, the group had 34 production sites worldwide.
Net sales break down geographically as follows: the Netherlands (3%), the United States (48.8%), Germany (7.4%), China (5%), Italy (4%), Mexico (3.4%), Japan (3.1%), France (3%), Poland (2.5%) and other (19.8%).
LYONDELLBASELL INDUSTRIES N.V. 
