HOUSTON and LONDON, Oct. 29, 2021 /PRNewswire/ --
Third Quarter 2021 Highlights
- Robust demand and tight market conditions supported strong
margins
- Accelerated our climate goals: 30% CO2 reduction by
2030 and net zero by 2050 (scope 1 and 2)
- Net Income: $1.8 billion
- Diluted earnings per share: $5.25
per share
- EBITDA: $2.7 billion
- Record cash from operating activities: $2.1 billion
- Strong cash flow supported debt reduction of $0.7 billion with $2.4
billion year-to-date
- Paid dividends and repurchased approximately 1 million shares
totaling $0.5 billion in returns for
shareholders
Comparisons with the prior quarter and third quarter
2020 are available in the following table:
Table 1 - Earnings
Summary
|
Millions of
U.S. dollars (except share data)
|
Three Months
Ended
|
Nine Months
Ended
|
September
30,
2021
|
June 30,
2021
|
September
30,
2020
|
September
30,
2021
|
September
30,
2020
|
Sales and other
operating revenues
|
$12,700
|
$11,561
|
$6,776
|
$33,343
|
$19,816
|
Net income
|
1,762
|
2,059
|
114
|
4,891
|
572
|
Diluted earnings per
share
|
5.25
|
6.13
|
0.33
|
14.57
|
1.69
|
Weighted average
diluted share count
|
334
|
335
|
334
|
334
|
334
|
EBITDA
(a)
|
2,691
|
3,018
|
466
|
7,294
|
1,872
|
|
Excluding LCM
and Impairment (a)
|
Net income
|
$1,762
|
$2,059
|
$427
|
$4,891
|
$1,148
|
Diluted earnings per
share
|
5.25
|
6.13
|
1.27
|
14.57
|
3.42
|
LCM (benefits)
charges, pre-tax
|
—
|
—
|
(160)
|
—
|
163
|
Impairment,
pre-tax
|
—
|
—
|
582
|
—
|
582
|
EBITDA
|
2,691
|
3,018
|
888
|
7,294
|
2,617
|
|
(a) See "Information
Related to Financial Measures" for a discussion of the Company's
use of EBITDA and EBITDA excluding LCM and Impairment and Table 2
for reconciliations of net income to those measures. LCM stands for
"lower of cost or market." Impairment is related to charges
incurred in the Refining
segment.
|
LyondellBasell Industries (NYSE: LYB) today announced net income
for the third quarter 2021 of $1.8
billion, or $5.25 per
share. Third quarter 2021 EBITDA was $2.7 billion.
"Our third quarter results reflect robust demand for
LyondellBasell products and tight market conditions, which
supported strong margins across most of our businesses," said
Bob Patel, LyondellBasell CEO.
"In North America, solid demand supported continued strength in
benchmark integrated polyethylene margins and drove polypropylene
spreads to historic highs. In contrast, higher naphtha and
natural gas liquids feedstock prices in Europe led to margin compression for both
olefins and polyolefins in our Olefins and Polyolefins EAI
segment. Our Intermediates and Derivatives segment was
impacted by rising costs that reduced margins across most of its
businesses. We also lost volume and incurred higher costs in
connection with downtime in our acetyls business. Increasing
mobility has improved demand and margins for transportation fuels
produced by our Refining segment."
"Strong market conditions and cash generation from our growth
investments resulted in record cash from operating activities
during the third quarter. We redeemed $500 million in bonds to bring our year-to-date
debt reduction to $2.4 billion and
repurchased 1 million shares during the quarter."
"In September, we reaffirmed our commitment to address the
global challenge of climate change by increasing our goals for
reducing scope 1 and scope 2 CO2 emissions at least 30
percent by 2030 relative to a 2020 baseline and achieving net zero
from our global operations by 2050," said Patel.
OUTLOOK
"We expect strong demand for LyondellBasell's
products to continue as the roll out of vaccines drives further
improvement in economic activity around the world. Over the
next several quarters, we expect unmet consumer demand will extend
strength in automotive, construction and other durable goods
markets. While margins are likely to moderate due to
increasing feedstock prices, energy costs and winter seasonality,
we anticipate ongoing benefits from strong markets and tight
industry supply."
"At LyondellBasell, our goal is to deliver results that meet
both our financial and sustainability objectives. We have
emerged stronger from last year's downturn by investing in growth
and leveraging our culture of operational excellence and financial
discipline over a larger asset base. LyondellBasell's step
change in earnings power and cash generation is increasingly
visible. With an additional $650
million of bonds redeemed during October, we continued to
strengthen our investment grade balance sheet and remain on track
to reduce debt by up to $4 billion in
2021. We expect cash generation will continue to provide
flexibility for opportunistic share repurchases. At the same
time, we are helping to address the global challenges of climate
change by setting ambitious goals to reduce our CO2
emissions and achieve carbon neutrality for our company by the
middle of the century. Altogether, LyondellBasell's growth
strategy is creating momentum to deliver sustainable value over the
coming years," Patel said.
CONFERENCE CALL
LyondellBasell will host a conference
call October 29 at 11 a.m.
EDT. Participants on the call will include Chief
Executive Officer Bob Patel,
Executive Vice President and Chief Financial Officer Michael McMurray and Head of Investor Relations
David Kinney. For event access, the toll-free dial-in number
is 1-877-407-8029, international dial-in number is 201-689-8029 or
click the CallMe link. The slides and webcast that accompany
the call will be available at
www.LyondellBasell.com/earnings. A replay of the call will be
available from 1:00 p.m. EDT
October 29 until November 30. The replay toll-free
dial-in numbers are 1-877-660-6853 and 201-612-7415. The access ID
for each is 13723396.
ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one
of the largest plastics, chemicals and refining companies in the
world. Driven by its employees around the globe,
LyondellBasell produces materials and products that are key to
advancing solutions to modern challenges like enhancing food safety
through lightweight and flexible packaging, protecting the purity
of water supplies through stronger and more versatile pipes,
improving the safety, comfort and fuel efficiency of many of the
cars and trucks on the road, and ensuring the safe and effective
functionality in electronics and appliances. LyondellBasell
sells products into more than 100 countries and is the world's
largest producer of polypropylene compounds and the largest
licensor of polyolefin technologies. In 2021, LyondellBasell
was named to Fortune magazine's list of the "World's Most Admired
Companies" for the fourth consecutive year. More information
about LyondellBasell can be found at www.LyondellBasell.com.
FORWARD-LOOKING STATEMENTS
The statements in this
release relating to matters that are not historical facts are
forward-looking statements. These forward-looking statements
are based upon assumptions of management of LyondellBasell which
are believed to be reasonable at the time made and are subject to
significant risks and uncertainties. When used in this
presentation, the words "estimate," "believe," "continue," "could,"
"intend," "may," "plan," "potential," "predict," "should," "will,"
"expect," and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. Actual results
could differ materially based on factors including, but not limited
to, market conditions, the business cyclicality of the chemical,
polymers and refining industries; the availability, cost and price
volatility of raw materials and utilities, particularly the cost of
oil, natural gas, and associated natural gas liquids; uncertainties
and impacts related to the extent and duration of the pandemic;
competitive product and pricing pressures; labor conditions; our
ability to attract and retain key personnel; operating
interruptions (including leaks, explosions, fires, weather-related
incidents, mechanical failure, unscheduled downtime, supplier
disruptions, labor shortages, strikes, work stoppages or other
labor difficulties, transportation interruptions, spills and
releases and other environmental risks); the supply/demand balances
for our and our joint ventures' products, and the related effects
of industry production capacities and operating rates; our ability
to manage costs; future financial and operating results; benefits
and synergies of any proposed transactions; our ability to
identify, evaluate and complete any strategic alternative related
to the refinery; legal and environmental proceedings; tax rulings,
consequences or proceedings; technological developments, and our
ability to develop new products and process technologies; our
ability to meet our sustainability goals, including the ability
to operate safely, increase production of recycled and
renewable-based polymers, and reduce our emissions and achieve net
zero emissions by the time set in our respective goals; our ability
to procure energy from renewable sources; potential governmental
regulatory actions; political unrest and terrorist acts; risks and
uncertainties posed by international operations, including foreign
currency fluctuations; and our ability to comply with debt
covenants and to amend, extend, repay, redeem, service, and reduce
our debt. Additional factors that could cause results to
differ materially from those described in the forward-looking
statements can be found in the "Risk Factors" section of our Form
10-K for the year ended December 31,
2020, which can be found at www.LyondellBasell.com on
the Investor Relations page and on the Securities and Exchange
Commission's website at www.sec.gov. There is no assurance
that any of the actions, events or results of the forward-looking
statements will occur, or if any of them do, what impact they will
have on our results of operations or financial condition.
Forward-looking statements speak only as of the date they were made
and are based on the estimates and opinions of management of
LyondellBasell at the time the statements are made.
LyondellBasell does not assume any obligation to update
forward-looking statements should circumstances or management's
estimates or opinions change, except as required by law.
INFORMATION RELATED TO FINANCIAL MEASURES
This release
makes reference to certain non-GAAP financial measures as defined
in Regulation G of the U.S. Securities Exchange Act of 1934, as
amended.
We report our financial results in accordance with U.S.
generally accepted accounting principles, but believe that certain
non-GAAP financial measures, such as EBITDA and diluted EPS
exclusive of adjustment for "lower of cost or market" ("LCM")
provide useful supplemental information to investors regarding the
underlying business trends and performance of the company's ongoing
operations and are useful for period-over-period comparisons of
such operations. Non-GAAP financial measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the financial measures prepared in accordance with
GAAP.
We calculate EBITDA as income from continuing operations plus
interest expense (net), provision for (benefit from) income taxes,
and depreciation and amortization. EBITDA should not be
considered an alternative to profit or operating profit for any
period as an indicator of our performance, or as an alternative to
operating cash flows as a measure of our liquidity. We also
present EBITDA, net income and diluted EPS exclusive of adjustments
for LCM and impairment. LCM is an accounting rule consistent
with GAAP related to the valuation of inventory. Our
inventories are stated at the lower of cost or market. Cost
is determined using the last-in, first-out (LIFO) inventory
valuation methodology, which means that the most recently incurred
costs are charged to cost of sales and inventories are valued at
the earliest acquisition costs. Fluctuation in the prices of
crude oil, natural gas and correlated products from period to
period may result in the recognition of charges to adjust the value
of inventory to the lower of cost or market in periods of falling
prices and the reversal of those charges in subsequent interim
periods as market prices recover. Property, plant and
equipment are recorded at historical costs. If it is
determined that an asset or asset group's undiscounted future cash
flows will not be sufficient to recover the carrying amount, an
impairment charge is recognized to write the asset down to its
estimated fair value.
These measures as presented herein, may not be comparable to
similarly titled measures reported by other companies due to
differences in the way the measures are calculated. This
release contains time sensitive information that is accurate only
as of the time hereof. Information contained in this release
is unaudited and subject to change. LyondellBasell undertakes
no obligation to update the information presented herein except to
the extent required by law.
Additional operating and financial information may be found on
our website at www.LyondellBasell.com/investorrelations.
These measures as presented herein, may not be comparable to
similarly titled measures reported by other companies due to
differences in the way the measures are calculated.
Table 2 -
Reconciliation of Net Income to EBITDA, including and excluding LCM
and Impairment
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Millions of U.S.
dollars
|
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
Net income
|
|
$
|
1,762
|
|
$
|
2,059
|
|
$
|
114
|
|
$
|
4,891
|
|
$
|
572
|
add: LCM charges
(benefits), after-tax
|
|
—
|
|
—
|
|
(133)
|
|
—
|
|
130
|
add: Impairment of
long-lived assets, after-tax
|
|
—
|
|
—
|
|
446
|
|
—
|
|
446
|
Net income
excluding LCM and impairment
|
|
1,762
|
|
2,059
|
|
427
|
|
4,891
|
|
1,148
|
less: LCM (charges)
benefits, after-tax
|
|
—
|
|
—
|
|
133
|
|
—
|
|
(130)
|
less: Impairment of
long-lived assets, after-tax
|
|
—
|
|
—
|
|
(446)
|
|
—
|
|
(446)
|
Net
income
|
|
1,762
|
|
2,059
|
|
114
|
|
4,891
|
|
572
|
Loss (income) from
discontinued operations, net of tax
|
|
1
|
|
(2)
|
|
—
|
|
1
|
|
—
|
Income from
continuing operations
|
|
1,763
|
|
2,057
|
|
114
|
|
4,892
|
|
572
|
Provision for (benefit from)
income taxes
|
|
452
|
|
506
|
|
(125)
|
|
1,028
|
|
(82)
|
Depreciation and
amortization
|
|
351
|
|
330
|
|
358
|
|
1,016
|
|
1,056
|
Interest expense,
net
|
|
125
|
|
125
|
|
119
|
|
358
|
|
326
|
add: LCM charges
(benefits), pre-tax
|
|
—
|
|
—
|
|
(160)
|
|
—
|
|
163
|
EBITDA excluding
LCM
|
|
2,691
|
|
3,018
|
|
306
|
|
7,294
|
|
2,035
|
add: Impairment of
long-lived assets, pre-tax
|
|
—
|
|
—
|
|
582
|
|
—
|
|
582
|
EBITDA excluding
LCM and impairment
|
|
2,691
|
|
3,018
|
|
888
|
|
7,294
|
|
2,617
|
less: LCM (charges)
benefits, pre-tax
|
|
—
|
|
—
|
|
160
|
|
—
|
|
(163)
|
less: Impairment of
long-lived assets, pre-tax
|
|
—
|
|
—
|
|
(582)
|
|
—
|
|
(582)
|
EBITDA
|
|
$
|
2,691
|
|
$
|
3,018
|
|
$
|
466
|
|
$
|
7,294
|
|
$
|
1,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE LyondellBasell Industries