LyondellBasell Industries (LYB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $924 million ($2.82 per diluted share), with adjusted net income of $734 million ($2.24 per share), reflecting sequential improvement from higher production and seasonal demand, especially in O&P Americas and I&D segments.

• EBITDA reached $1.6 billion, or $1.4 billion excluding identified items, and cash from operating activities was $1.3 billion, supporting disciplined execution of long-term strategy.

• Advanced strategic initiatives included divesting the EO&D business for $700 million, acquiring a 35% stake in NATPET for $500 million, and announcing a strategic review of European assets.

• Returned $513 million to shareholders in Q2 via dividends and share repurchases, with a 7% dividend increase to $1.34 per share.

• On track to realize 2027 normalized profitability targets and accelerate Value Enhancement Program (VEP) results.

Financial highlights

• Q2 2024 sales and operating revenues were $10.56 billion, up 6% sequentially; net income was $924 million, and EPS was $2.82.

• Adjusted EBITDA was $1.4 billion; cash from operating activities totaled $1.3 billion in Q2.

• Maintained $2.9 billion in cash and short-term investments and $7.0 billion in total liquidity at quarter-end.

• Capital expenditures were $484 million in Q2 2024.

• Free cash flow conversion rate was 95% over the last 12 months.

Outlook and guidance

• Expect slight improvement in 2H24 over 1H24 as global markets recover, with VEP program estimated to contribute $400 million to 2024 EBITDA.

• Q3 margins expected to benefit from low North American and Middle East feedstock costs; oxyfuels margins anticipated to remain above historical levels.

• Projected Q3 average operating rates: 85% for North American O&P, 80% for European O&P, and 75% for I&D.

• North American polyethylene and polypropylene demand up over 10% and 5% year-to-date, respectively.

• Minimal polyolefin capacity additions expected in North America; demand growth aligns with long-term trends.