LYB generated $3.8 billion in cash from operating activities during 2024
LyondellBasell reported a net loss for the fourth quarter 2024 of $603 million, or $1.87 per share. During the quarter, the company recognized identified items of $852 million, net of tax. Fourth quarter 2024 EBITDA was $(409) million, or $689 million excluding identified items. In addition to the identified items, non-cash LIFO inventory valuation charges impacted pre-tax quarterly results by approximately $23 million.
“During the fourth quarter, our businesses delivered excellent cash performance amid difficult market conditions. Our strong cash generation and robust balance sheet enabled us to achieve meaningful progress on our strategic goals to drive profitable and sustainable growth at LyondellBasell. I am very proud of our team's progress in building a profitable Circular & Low Carbon Solutions business, where volumes grew by 65% during 2024,” said Peter Vanacker, LYB Chief Executive Officer.
Fourth quarter margins declined across most businesses as costs for NGL feedstocks and natural gas increased while product prices were restrained by seasonally slower demand. Robust export demand for North American polyethylene offset some seasonal volume moderation in domestic markets.
Sequentially higher ethane raw material costs led to lower integrated polyethylene margins. Outside of North America, seasonally slower demand for olefins and polyolefins and downtime at the company's European assets impacted volumes and margins. Significantly lower gasoline crack spreads reduced refining and oxyfuels margins as well as the value of co-product fuels in the Olefins & Polyolefins segments.
FULL YEAR 2024 RESULTS
Full year 2024 net income was $1.4 billion, or $4.15 per share. During the year, the company recognized identified items of $734 million, net of tax. These items, which impacted full year earnings by $2.25 per share included non-cash asset write-downs, costs incurred from exiting the refining business and the gain on sale of the Ethylene Oxide and Derivatives business. Full year 2024 EBITDA was $3.5 billion, or $4.3 billion excluding identified items.
LYB generated $3.8 billion in cash from operating activities during 2024. The company remains committed to a disciplined capital allocation approach. In 2024, approximately $1.8 billion was reinvested in the business through capital expenditures while $1.9 billion was returned to shareholders through quarterly dividends and share repurchases. The company maintains a robust investment-grade balance sheet with $8.0 billion of available liquidity, including $3.4 billion of cash and cash equivalents, at year-end.
Throughout 2024, petrochemical markets faced headwinds from soft global demand, rising raw material costs and economic uncertainty. Markets were broadly pressured by weak demand for durable goods, which impacted margins in the company's Olefins & Polyolefins and Intermediates & Derivatives segments. Margin recovery in the company's Advanced Polymer Solutions segment was limited by global declines in automotive production. LYB continues to be well-positioned to navigate challenging markets and generate strong cash returns.
STRATEGY HIGHLIGHTS
“LyondellBasell is successfully navigating difficult market conditions while delivering excellent cash performance during what has been the longest and deepest downturn of my career. And we are not wavering in the execution of our strategy. We continue to grow and upgrade our core businesses with decisive portfolio management. The volumes of our sustainable products are rapidly growing and aligned with our profitability targets. We are sharpening our focus on value creation while diligently managing and tracking our progress through a highly disciplined Value Enhancement Program. With a robust investment-grade balance sheet, LYB is well-positioned to deliver on our strategic promises and reward shareholders with a growing dividend as part of our overall value proposition," said Vanacker.
The company's strategy, outlined at its 2023 Capital Markets Day, is focused on generating value-added growth to deliver $3 billion of incremental Normalized EBITDA by 20274. By the end of 2024, LYB unlocked approximately $1.3 billion of incremental Normalized EBITDA, primarily from the successful start-up of new PO/TBA capacity and its Value Enhancement Program.
During 2025, LYB expects to unlock additional profitability from the Value Enhancement Program, transformation of the Advanced Polymer Solutions business, growth of the company's CLCS business, as well as further organic and inorganic growth initiatives.
OUTLOOK
Entering 2025, LYB remains watchful and prepared for the macroeconomic catalysts that will eventually drive restocking of supply chains, improve demand for durable goods and support a more broad-based economic recovery. One indicator of recovery is that North American domestic demand for polyolefins rebounded in 2024, after two years of declines.
The company expects seasonal demand improvements to emerge across most product lines during the first quarter. Reductions in interest rates, moderation of inflation and pent-up demand should be supportive for increased consumption of durable goods, benefiting the company's polypropylene and Intermediates and Derivatives businesses. Increased driving and summertime gasoline specifications should lead to typical seasonal improvements in oxyfuels margins.
LYB expects a gradual recovery in oxyfuel margins over the summer months, with strong octane premiums and the relatively low cost of butane raw materials supportive of long-term oxyfuels fundamentals. Tariff and trade uncertainties are potential headwinds. Consistent with the company's prior guidance, refining operations will cease in the first quarter of 2025, a strategic milestone paving the way for continued growth in circular and low-carbon feedstocks and products.
LYB is aligning first quarter operating rates with global demand and expects to operate Olefins & Polyolefins Americas assets at approximately 80%, Olefins & Polyolefins EAI assets at approximately 75%, and Intermediates & Derivatives assets at approximately 80%.
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