LyondellBasell Posts Q2 Sales Miss, EPS Beat, Expects Weak Demand In Q3

LyondellBasell Industries N.V. LYB reported the Q2 FY23 revenues of $10.31 billion, down from $14.84 billion a year ago, which missed the consensus of $10.40 billion.

Adjusted EPS stood at $2.44, beating the consensus of $2.29.

Adjusted EBITDA stood at $1.5 billion vs. $2.45 a year ago. 

Global olefins and polyolefins margins increased modestly during Q2 on lower feedstock costs in both the U.S. and Europe.

The company returned $508 million to shareholders through dividends and share repurchases.

In May, the company increased its quarterly dividend per share by 5% to $1.25.

In Q2, LyondellBasell generated an operating cash flow of $1.3 billion and ended the quarter with $6.6 billion in available liquidity. 

As of June 30, 2023, cash and liquid investments stood at $2.49 billion.

Outlook: LYB says its Value Enhancement Program announced in March, is progressing ahead of schedule.

Consequently, the company raised the near-term target by around 30% and is now expected to deliver $150 million of net income and recurring annual EBITDA of $200 million by year-end 2023. 

In Q3, the company expects summer seasonality benefits to be more than offset by soft demand due to ongoing economic uncertainty. 

It expects petrochemical margins to be impacted by stagnant demand, volatile feedstock costs, and new capacity in North America and China. 

In Q3, LYB projects average operating rates of 85% for North American olefins and polyolefins (O&P) assets and 75% for European O&P and Intermediates & Derivatives assets to be at par with the global market demand.

In May, the company planned to delay the cessation of operations at Houston Refinery from the end of this year to no later than the end of the first quarter of 2025. 

Price Action: LYB shares are trading lower by 3.66% at $92.90 premarket on the last check Friday.