LyondellBasell reports record Q2 earnings of $1.17 billion

Global petrochemicals giant LyondellBasell Industries today reported record second quarter 2014 earnings of $1.17 billion, or $2.22 diluted earnings per share, from continuing operations. Second quarter 2014 earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at $1.94 billion.

The increase from the first quarter of 2014 was primarily due to olefins and polyolefins segment results in the Americas, which contributed $1 billion to the EBDTA for the quarter, the company said in a release.

Jim Gallogly, chief executive of LyondellBasell, said, "We had record earnings this quarter of $2.22 per share, while our EBITDA approached $2 billion.  Importantly, every segment contributed to this achievement. Of particular note was the strength in our Olefins and Polyolefins - Americas segment which generated nearly $1 billion of EBITDA even while we were performing significant scheduled maintenance at our La Porte ethylene site.

''In addition to the strong quarterly earnings, we repurchased approximately 19 million of our shares during the second quarter, completing the initial 10 per cent share repurchase authorisation. We also initiated repurchases under the second 10 per cent authorisation."

Gallogly said the delay in completing the La Porte ethylene turnaround - in part due to a mechanical issue with a compressor and supplier upsets - impacted the company's intermediates and derivatives business. Without these, he said, results could have been even better.

''Despite these temporary setbacks, our commitment to Operational Excellence continues to be the foundation of our success," he said.

"Industry fundamentals remain strong, and we continue to execute on our investment program.  During the third quarter we expect to begin production from the 800 million pound per year La Porte ethylene expansion.  This is the first of three ethylene expansions and continues to put us well ahead of new greenfield plants pursued by others in the industry," Gallogly added.

LyondellBasell manages operations through five operating segments, which include olefins and polyolefins (Americas, Europe, Asia and International), intermediates and derivatives, refining and technology.

Olefins and Polyolefins-Americas, which produces ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and catalloy process resins, achieved record EBITDA of $242 million in the second quarter versus the first quarter 2014. 

Compared to the prior period, olefins results increased approximately $220 million. 

The olefins and polyolefins business in Europe, Asia, International, however, reported a decline in EBIDTA of $37 million for the quarter ended 30 June 2014 versus three months ended 31 March 2014. Excluding the benefits of a $52 million environmental settlement in the first quarter, EBITDA increased by $15 million. 

Refining business, which produces gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials, reported an $8 million increase in EBDTA for the three months ended 30 June 2014 versus three months ended 31 March 2014. The refinery processed 257,000 barrels per day, up 10,000 barrels per day from the prior quarter.

The corresponding Houston refinery spread was relatively unchanged, where EBITDA increased $117 million versus the second quarter 2013. The refinery processed 257,000 barrels per day, down 8,000 barrels per day from the prior year period. Compared to the second quarter 2013, the Maya 2-1-1 benchmark spread increased $5.43 per barrel.

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $415 million in the second quarter 2014.  Cash and short-term securities balance was $3.5 billion as of 30 June 2014.

The company repurchased approximately 19 million of its outstanding ordinary shares and paid $370 million in dividends during the second quarter of 2014.  There were 515 million common shares outstanding as of 30 June 2014.