Improvement across the board in 2011 / Earnings pressure in Q4 / Refinery operations drive
LyondellBasell (Rotterdam / The Netherlands; saw business improve across its portfolio in 2011. The best performance was turned in by the North American olefins and refinery operations, which benefit from cheap feedstocks. Group EBITDA rose by 31% against 2010 to USD 5.3 bn, as sales advanced by 24% to just over USD 51 bn. The fourth quarter diminished the overall performance, with refinancing issues and the refinery closure at Berre / France – see of 29.09.2011 – leading to a net loss of USD 218m.

CEO Jim Gallogly said global margins in Q4 were impacted by “broader trends,” including an overall economic slowdown that led customers to destock and delay orders. The slowdown is reflected in quarterly earnings figures, which show a net loss of USD 218m and EBITDA down by nearly 30% year-on-year to USD 536m. Quarterly sales of USD 11.4 bn were 8% ahead of the USD 10.6 bn reported for 2010, which included the group’s last four months under from Chapter 11 bankruptcy protection – see of 04.05.2010.

In the reporting segment “Olefins & Polyolefins – Americas” EBITDA decreased by 19% in Q4 2011 against the 2010 period to USD 407m. Generally reflecting the group’s full-year performance, the buoyancy of the olefins business led to “significantly improved” margins. The downside of this was a decline in PE earnings resulting from the same higher ethylene costs that boosted the upstream end. PP profits deteriorated accordingly. Volume sales of polyolefins were unchanged year-on-year. In full year 2011, the segment’s EBITDA improved by almost 14% year-on-year to USD 931m.

The reporting segment “Olefins & Polyolefins – Europe” saw its EBITDA halved in Q4 2011 against the 2010 quarter, to USD 62m from USD 125m. LyondellBasell said olefins results were “relatively unchanged,” but earnings in the PE business deteriorated due to lower sales volumes and “compressed margins.” By contrast, the PP compounding operations “improved slightly,” year-on-year. Full-year EBITDA, at USD 1.05 bn, was 23% higher.

The group’s technology licensing business also was more sluggish in the final quarter of last year, but polyolefin catalysts results improved. For the segment as a whole, quarterly EBITDA fell by 18% to USD 36m. Full-year results show EBITDA nearly flat at USD 214m (USD 212m).The closure of an R&D centre in the US also impacted annual earnings.

Addressing prospects for 2012, Gallogly said LyondellBasell expects slow economic activity in certain businesses in Europe and Asia, echoing remarks made by US competitor Dow Chemical (Midland, Michigan; Like Dow, the Dutch-based company said the market environment in the US appears to be improving. Ethylene chain margins have increased from their Q4 lows as ethane prices have fallen and notations for ethylene co-products and polyolefins have improved.

Additionally, the LyondellBasell CEO said a low natural gas-to-crude oil price spread creates favourable conditions for US business. The propylene, PP compounding businesses, along with the Saudi Arabian and certain Asian joint ventures remain “on a solid path.”
15.02.2012 [221525-0]
Published on 15.02.2012
German version...German version of this article...

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