LyondellBasell generated US$1.7 billion in cash from operating activities in the third quarter and achieved 102% cash conversion over the past twelve months
LyondellBasell Industries announced net income for the third quarter 2023 of US$ 747 million compared US4 572 million during Q3 2022. During the quarter, the company recognized identified items of $57 million, net of tax, which impacted third quarter earnings by $0.17 per share. Third quarter 2023 EBITDA was $1.4 billion.
Exceptional oxyfuels margins contributed to a record Intermediates & Derivatives EBITDA of $708 million during the third quarter. Global olefins and polyolefins margins were compressed by higher feedstock costs, tepid polymer demand in both the U.S. and Europe, and new industry capacity. North American polyethylene export volumes increased as global trade flows continued to normalize toward pre-pandemic levels.
LyondellBasell generated US$1.7 billion in cash from operating activities in the third quarter and achieved 102% cash conversion over the past twelve months. The company remains committed to its balanced and disciplined capital allocation framework and priorities. Third quarter cash from operating activities covered the repayment of maturing bonds, capital investments and the return of $448 million to shareholders through dividends and share repurchases. Cash and short-term investments increased by $350 million during the quarter. Available liquidity was $7 billion at the end of the quarter.
In September, LyondellBasell launched +LC (Low Carbon) solutions for select chemical products including propylene oxide, styrene and other products sourced from recycled and renewable-based feedstocks. The company is providing +LC solutions to meet the growing customer demand for sustainable materials that have a lower greenhouse gas (GHG) footprint relative to fossil-based alternatives. In addition, with a new solar power purchase agreement in Spain, the company has rapidly achieved 78% of its goal to procure half of its electricity from renewable sources by 2030.
"LyondellBasell is delivering resilient results and outstanding cash conversion amid challenging market conditions while remaining focused on the execution of our long-term strategy. The successful startup of our new propylene oxide and oxyfuels asset is aligned with our strategy to grow and upgrade our core businesses. Our oxyfuels business captured exceptionally strong oxyfuels margins that drove record quarterly results for our Intermediates and Derivatives segment," said Peter Vanacker, LyondellBasell Chief Executive Officer.
In the fourth quarter, the company expects seasonally softer demand across most businesses. Higher feedstock costs, new industry capacity and the slow pace of Chinese demand growth continue to pressure global olefins and polyolefins margins. Oxyfuels and refining margins are expected to decrease following the conclusion of the summer driving season. Nonetheless, oxyfuels margins are expected to remain well above historical averages. During the fourth quarter, LyondellBasell expects to operate its assets in line with market demand with average operating rates of 85% for North American olefins and polyolefins (O&P) assets, 75% for European O&P assets and 70% for Intermediates & Derivatives assets.
"Implementation of LyondellBasell's long-term strategy remains our top priority. One year after launching our Value Enhancement Program, we are highly confident we will exceed our 2023 recurring annual EBITDA exit run-rate target of $200 million(c). The three pillars of our strategy reinforce each other. By stepping up our performance and culture with a pivot toward value creation, LyondellBasell will be able to grow and upgrade our core while building a profitable Circular and Low Carbon Solutions business. Looking ahead, we will continue to leverage our unique advantages to position LyondellBasell for a sustainable future," said Vanacker.
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