LyondellBasell Industries (NYSE: LYB) today announced net income for the second quarter 2023 of $715 million, or $2.18 per diluted share.
During the quarter, the company recognized identified items of $86 million, net of tax. These items, which impacted second quarter earnings by $0.26 per share, were related to costs incurred from plans to exit the refining business. Second quarter 2023 EBITDA was $1.4 billion, or $1.5 billion excluding identified items.
Global olefins and polyolefins margins improved modestly during the second quarter driven by lower feedstock costs in both the U.S. and Europe. New capacity from the start of LyondellBasell's propylene oxide and oxyfuels plant in Texas was largely offset by planned maintenance at the company's existing assets. Oxyfuels margins remained strong, supported by low butane costs and robust demand for fuels. Refining margins declined from first quarter 2023 highs but remained above long-term averages.
LyondellBasell generated $1.3 billion in cash from operating activities in the second quarter and achieved 103% cash conversion(b) over the past twelve months. Available liquidity was $6.6 billion at the end of the quarter. The company remains committed to a disciplined approach to capital allocation. Approximately $300 million was reinvested in the business and $508 million was returned to shareholders through dividends and share repurchases. During the second quarter, LyondellBasell issued its inaugural green bond for $500 million to support investments advancing the company's strategy for leadership in sustainability.
LyondellBasell moved forward on the new strategy revealed at its Capital Markets Day in March. The company's Value Enhancement Program is progressing ahead of schedule. As a result, the program's near-term target was increased by approximately 30% and is now expected to deliver $150 million of net income and $200 million of recurring annual EBITDA by year end 2023. In May, LyondellBasell announced the decision to extend refining operations to no later than the end of the first quarter of 2025, as the company develops options to redeploy the site's workforce and assets in support of the company's sustainable growth strategy. LyondellBasell announced additional acquisitions and partnerships during the quarter toward building a profitable and leading Circular & Low Carbon Solutions business. In June, MSCI recognized the company's progress and upgraded LyondellBasell's ESG rating to 'AA', placing the company within the top 10% of companies in the sector.
'Our new strategy is driving focus and purpose across the company. LyondellBasell's employees are enthusiastically implementing our new strategy. We are committed to becoming the leader in fulfilling the rapidly increasing demand for sustainable solutions from our customers and society,' said Peter Vanacker, LyondellBasell Chief Executive Officer.
Second Quarter 2023 Highlights
Net Income: $715 million, $801 million excluding identified items(a)
Diluted earnings per share: $2.18 per share; $2.44 per share excluding identified items
EBITDA: $1.4 billion, $1.5 billion excluding identified items
Net cash provided by operating activities: $1.3 billion; $4.8 billion over trailing 12 months
Increased 2023 target for Value Enhancement Program
Increased quarterly dividend by 5% to $1.25 per share
Returned $508 million to shareholders through dividends and share repurchases
Extending refining operations through no later than end of first quarter 2025
OUTLOOK
In the third quarter, the company expects typical benefits from summer seasonality to be more than offset by soft demand due to ongoing economic uncertainty. Stagnant demand, volatile feedstock costs and new capacity in North America and China are challenging petrochemical margins. Summer demand for transportation fuels continues to support attractive oxyfuels and refining margins. During the third quarter, LyondellBasell expects average operating rates of 85% for North American olefins and polyolefins (O&P) assets and 75% for European O&P as well as Intermediates & Derivatives assets in line with global market demand. The company believes current market conditions will persist amidst challenging economic conditions and a slower than expected recovery in China.
'LyondellBasell is steadfast in our resolve to advance on the three pillars of our long-term strategy despite near-term macro challenges. Our rapid progress is laying the necessary groundwork to extend our leadership in Circular & Low Carbon Solutions. I am pleased to see our Value Enhancement Program being embraced by our entire organization and driving sustainable value for our shareholders,' said Vanacker.
ABOUT LYONDELLBASELL
We are LyondellBasell (NYSE: LYB) - a leader in the global chemical industry creating solutions for everyday sustainable living. Through advanced technology and focused investments, we are enabling a circular and low carbon economy. Across all we do, we aim to unlock value for our customers, investors and society. As one of the world's largest producers of polymers and a leader in polyolefin technologies, we develop, manufacture and market high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare.
FORWARD-LOOKING STATEMENTS
The statements in this release relating to matters that are not historical facts are forward-looking statements.
These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties.
When used in this release, the words 'estimate,' 'believe,' 'continue,' 'could,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'should,' 'will,' 'expect,' and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, market conditions, 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; our ability to successfully implement initiatives identified pursuant to our Value Enhancement Program and generate anticipated earnings; 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 manage costs; future financial and operating results; benefits and synergies of any proposed transactions and our ability to align our assets with our core; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; our ability to meet our sustainability goals, including the ability to operate safely, increase production of recycled and renewable-based polymers to meet our targets and forecasts, and reduce our emissions and achieve net zero emissions by the time set in our goals; our ability to procure energy from renewable sources; our ability to build a profitable Circular & Low Carbon Solutions business; the continued operation of and successful shut down and closure of the Houston Refinery, including within the expected timeframe; 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 to repay 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, 2022, 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. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made.
LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change, except as required by law.
This release contains time sensitive information that is accurate only as of the date hereof. Information contained in this release is unaudited and is subject to change.
We undertake no obligation to update the information presented herein except as required by law.
LYONDELLBASELL INDUSTRIES N.V. 
