LyondellBasell 2ndQtr 2016 Earnings plus 10% buyback
PR Newswire
HOUSTON and LONDON, July 29, 2016
HOUSTON and LONDON, July 29, 2016 /PRNewswire/ --
Second Quarter 2016 Highlights
-- Income from continuing operations: $1.1 billion ($1.0 billion excluding
LCM1)
-- Diluted earnings per share: $2.56 per share ($2.45 per share excluding
LCM)
-- EBITDA: $1.8 billion ($1.7 billion excluding LCM)
-- Share repurchases and dividends totaled $1.1 billion; repurchased 8.8
million shares during the second quarter, approximately 2% of the
outstanding shares
****-- Authorized a fourth share repurchase program for up to an additional 10%
of shares over the next 18 months
-- Increased second quarter 2016 interim dividend by 9% to $0.85 per share
Comparisons with the prior quarter and second quarter 2015 are available in the following table:
Table 1 - Earnings
Summary
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
Millions of U.S.
dollars (except share
data) 2016 2016 2015 2016 2015
Sales and other
operating revenues $7,328 $6,743 $9,145 $14,071 $17,330
Net income(a) 1,091 1,030 1,329 2,121 2,493
Income from continuing
operations(b) 1,092 1,030 1,326 2,122 2,493
Diluted earnings per
share (U.S. dollars):
Net income(c) 2.56 2.37 2.82 4.93 5.22
Income from continuing
operations(b) 2.56 2.37 2.81 4.93 5.22
Diluted share count
(millions) 425 434 472 429 477
EBITDA(d) 1,783 1,807 2,186 3,590 4,138
Excluding LCM Impact:
LCM charges (benefits),
pre-tax (68) 68 (9) - - 83
Income from continuing
operations(b) 1,045 1,077 1,320 2,122 2,545
Diluted earnings per
share (U.S. dollars):
Income from continuing
operations(b) 2.45 2.48 2.79 4.93 5.33
EBITDA(d) 1,715 1,875 2,177 3,590 4,221
(a) Includes net loss attributable to non-controlling interests
and income (loss) from discontinued operations, net of tax.
See Table 10.
(b) See Table 11 for charges and benefits to income from
continuing operations.
(c) Includes diluted earnings (loss) per share attributable to
discontinued operations.
(d) See the end of this release for an explanation of the
Company's use of EBITDA and Table 8 for reconciliations of
EBITDA to net income and income from continuing operations.
1 LCM stands for "lower of cost or market." An explanation of
LCM and why we have excluded it from our financial
information in this press release can be found at the end of
this press release under "Information Related to Financial
Measures."
LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the second quarter 2016 of $1.1 billion, or $2.56 per share. Second quarter 2016 EBITDA was $1.8 billion. The quarter included a $68 million non-cash, pre-tax benefit for the impact of a lower of cost or market (LCM) inventory adjustment ($47 million after-tax benefit). Excluding the LCM adjustment, earnings from continuing operations during the second quarter totaled $1.0 billion, or $2.45 per share and EBITDA was $1.7 billion.
"Excluding the first quarter gain from the Petroken business sale and the impact of maintenance activities, overall second quarter results were similar to the first quarter. Balance across our business portfolio enabled us to generate earnings in excess of $1 billion and earnings per share of $2.56. Industry trends generally developed as we anticipated resulting in continued strong polyolefin performance and seasonally stronger fuel margins. However, due to an April upset at our refinery, the benefits of higher fuel margins were only seen in our Oxyfuels business," said Bob Patel, LyondellBasell's CEO.
OUTLOOK
"During the third quarter, chemical and polyolefin markets thus far have generally been well balanced with trends similar to the second quarter. However, refining and oxyfuel margins have declined. Within our system, refinery repairs have been completed, and the Corpus Christi ethylene plant expansion is expected to be completed by the end of the third quarter. During the second half of the year our plant maintenance schedule continues to be significant with turnarounds at additional O&P and I&D facilities. Although our inventory and scheduling efforts will only partially mitigate the production impact during this heavy planned maintenance period, we look forward to the continuing returns from these investments in long-term reliability," Patel said.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell manages operations through five operating segments: 1) Olefins & Polyolefins -- Americas; 2) Olefins & Polyolefins -- Europe, Asia and International (EAI); 3) Intermediates & Derivatives; 4) Refining; and 5) Technology.
The following comments and analysis represent underlying business activity and are exclusive of LCM inventory adjustments.
Olefins & Polyolefins - Americas (O&P-Americas) -- The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.
Table 2 - O&P--Americas
Financial Overview
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
Millions of U.S.
dollars 2016 2016 2015 2016 2015
Operating income $646 $707 $920 $1,353 $1,854
EBITDA 754 878 1,014 1,632 2,045
LCM charges (benefits),
pre-tax - - - - (21) - - 22
EBITDA excluding LCM
adjustments 754 878 993 1,632 2,067
Three months ended June 30, 2016 versus three months ended March 31, 2016 -- EBITDA decreased $124 million for the second quarter 2016 versus the first quarter 2016. First quarter 2016 results included a $57 million gain on the sale of the Petroken polypropylene business. Results declined by $67 million exclusive of the Petroken gain. Compared to the prior period, underlying olefin results were relatively unchanged as margins increased while customer and internal derivative maintenance resulted in reduced ethylene volumes. Combined polyolefin results continued to be strong despite declining by approximately $60 million. Polyethylene sales volumes declined by 8% due to plant maintenance. Polyethylene spreads increased by approximately 1 cent per pound. Polypropylene spreads declined by approximately 2 cents per pound and volumes were down 5% primarily due to the first quarter sale of Petroken. Joint venture equity income declined by $2 million.
Three months ended June 30, 2016 versus three months ended June 30, 2015 -- EBITDA decreased $239 million versus the second quarter 2015, excluding an unfavorable $21 million quarter to quarter variance as a result of the LCM inventory adjustments. Olefin results drove the decline as quarterly EBITDA decreased approximately $280 million versus the prior year primarily due to lower ethylene margin. Combined polyolefin results increased approximately $30 million versus the prior year period. Polyethylene results declined due to maintenance while margins were relatively unchanged. Polypropylene benefitted from a spread improvement of approximately 10 cents per pound and volumes were lower in 2016 due to the first quarter Petroken sale. Joint venture equity income improved by $12 million consistent with strong polypropylene margins.
Olefins & Polyolefins - Europe, Asia, International (O&P-EAI) -- The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and Polybutene-1 resins.
Table 3 - O&P--EAI Financial Overview
Millions of U.S.
dollars Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2016 2016 2015 2015 2016
Operating income $423 $358 $359 $781 $595
EBITDA 576 509 492 1,085 849
LCM charges (benefits),
pretax (40) 40 - - - - - -
EBITDA excluding LCM
adjustments 536 549 492 1,085 849
Three months ended June 30, 2016 versus three months ended March 31, 2016 -- EBITDA decreased by $13 million versus the first quarter 2016, excluding a favorable $80 million quarter to quarter variance as a result of LCM inventory adjustments. First quarter 2016 results included a $21 million gain on the sale of the Petroken polypropylene compounding business. Exclusive of the Petroken sale, results were relatively unchanged. Olefin results decreased approximately $30 million on relatively unchanged volumes. Combined polyolefin results were steady. Polypropylene compounds and polybutene-1 results increased by approximately $10MM. Equity income from joint ventures increased by $27 million consistent with strong polypropylene margins. |
