LyondellBasell Q3 Results Miss Estimates, Signals Softer Demand And Rising Costs For Q4

LyondellBasell Industries N.V. LYB shares are trading lower after the company reported worse-than-expected third-quarter results.

LYB reported revenues of $10.332 billion, down 2.8% year over year and missing the consensus of $10.601 billion.

Adjusted EBITDA stood at $1.21 billion (-14.1% Y/Y), and the margin contracted by 154 bps to 11.7%. Adjusted EPS stood at $1.88, below the consensus of $1.98.

North American polyethylene margins rose due to lower ethane and gas costs, with demand up over 7% year-to-date. High cracker operating rates boosted third-quarter ethylene volumes, while Europe and Asia margins benefited from lower feedstock costs.

LyondellBasell generated $670 million operating cash flow in the third quarter, with 80% cash conversion over 12 months.

The company invested $368 million in capital expenditures, returned $479 million to shareholders, and held $2.6 billion in cash with $7.3 billion in liquidity.

LyondellBasell’s CEO, Peter Vanacker, announced that the company started construction on its new MoReTec-1 facility in Germany, a key step toward a sustainable future.

Q4 Outlook: LyondellBasell anticipates softer demand in the fourth quarter due to seasonality, with sequentially higher natural gas and ethane feedstock costs likely impacting North American integrated polyolefins margins.

Operating rates are projected at 85% for North American O&P assets, 60% for European O&P, and 75% for I&D assets, with easing interest rates expected to boost durable goods demand in 2025.

“Despite challenging global macroeconomic conditions, our strong North American operations allowed us to capitalize on favorable ethylene margins in the region,” said Vanacker.

Price Action: LYB shares traded lower by 0.98% at $86.00 premarket at the last check Friday.