LyondellBasell Reports First-Quarter 2014 Results
PR Newswire
HOUSTON and LONDON, April 29, 2014
HOUSTON and LONDON, April 29, 2014 /PRNewswire/ --
First-Quarter 2014 Highlights
-- Diluted earnings per share of $1.72; $943 million income from continuing operations -- EBITDA of $1,668 million notwithstanding plant maintenance and weather-related cost increases -- Growth projects progressing with the start-up of a 200 million pounds per year polyethylene expansion, the commencement of the La Porte turnaround that will enable the third quarter addition of 800 million pounds per year of ethylene capacity, and the issuance of final permits for the Corpus Christi ethylene expansion -- Repurchased 15 million shares during the first quarter -- Shareholders approved a share repurchase program for an additional 10 percent of shares at the annual meeting on April 16, 2014; and the Supervisory Board approved a 10 cent per share increase of the quarterly interim dividend to $0.70 per share
LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the first quarter 2014 of $943 million or $1.72 diluted earnings per share. First quarter 2014 EBITDA was $1,668 million.
Comparisons with the prior quarter and first quarter 2013 are shown below:
Table 1 - Earnings Summary -------------------------------------- --------- ------------ --------- Three Months Ended ---------------------------------- March 31, December 31, March 31, Millions of U.S. dollars (except share data) 2014 2013 2013 -------------------------------------- --------- ------------ --------- Sales and other operating revenues $11,135 $11,138 $10,669 -------------------------------------- --------- ------------ --------- Net income(a) 944 1,175 900 -------------------------------------- --------- ------------ --------- Income from continuing operations 943 1,177 906 -------------------------------------- --------- ------------ --------- Diluted earnings per share (U.S. dollars): -------------------------------------- --------- ------------ --------- Net income(b) 1.72 2.11 1.55 ------------------------------------- --------- ------------ --------- Income from continuing operations 1.72 2.11 1.56 ------------------------------------- --------- ------------ --------- Diluted share count (millions) 548 555 578 -------------------------------------- --------- ------------ --------- EBITDA(c) 1,668 1,543 1,585 -------------------------------------- --------- ------------ --------- (a) Includes net loss attributable to non-controlling interests and income (loss) from discontinued operations, net of tax. See Table 10. (b) Includes diluted earnings (loss) per share attributable to discontinued operations. (c) See the end of this release for an explanation of the Company's use of EBITDA and Table 8 for reconciliations of EBITDA to income from continuing operations.
The first quarter 2014 income from continuing operations benefitted from $52 million related to an environmental indemnity settlement. There was no tax impact associated with this credit. The effect on diluted earnings per share was $0.09. Please see Table 11 for charges and benefits to income from continuing operations in the prior periods.
"The first quarter results were good despite headwinds from maintenance, weather-related raw material cost volatility, and shipping delays. Exclusive of these pressures, the underlying business fundamentals remained strong and relatively unchanged," said Jim Gallogly, LyondellBasell Chief Executive Officer.
"In the U.S., our key raw materials continue to be in abundant supply with ethane tracking natural gas prices. Although natural gas prices increased in the face of record winter temperatures, current pricing and the outlook have moderated reflecting the strength of U.S. shale developments," Gallogly said.
"The theme for our 2013 annual report was -- 'Taking the Early Advantage.' We are putting these words into action. Our growth program is generating immediate results as our methanol plant restart contributed to first quarter earnings and cash flow. During late March, we completed a 200 million pound per year polyethylene expansion at Matagorda and began the final steps of our La Porte ethylene expansion. Additionally in mid-April, we received the final environmental permits for our Corpus Christi ethylene expansion," Gallogly said.
OUTLOOK
"The industry trends that developed over the past few years are expected to continue in the near term. Likewise, conditions in our businesses are generally expected to be consistent with recent quarters and seasonal trends," Gallogly said. "During the second quarter, we expect significant planned downtime at our La Porte facility while we perform normal turnaround maintenance and additional steps to complete an 800 million pounds per year ethylene expansion. Inventory build-up in preparation for this downtime should enable us to meet customer demands while helping mitigate the financial impact on the second quarter. As we enter the summer driving season, our refining benchmark crack spread is expected to remain relatively unchanged from the first quarter," Gallogly said.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell manages operations through five operating segments: 1) Olefins and Polyolefins -- Americas; 2) Olefins and Polyolefins -- Europe, Asia and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.
Olefins and 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 ---------------------------------- March 31, December 31, March 31, Millions of U.S. dollars 2014 2013 2013 -------------------------------------- --------- ------------ --------- Operating income $656 $801 $821 -------------------------------------- --------- ------------ --------- EBITDA 736 883 898 -------------------------------------- --------- ------------ ---------
Three months ended March 31, 2014 versus three months ended December 31, 2013 -- EBITDA decreased $147 million versus the fourth quarter 2013. First quarter results were negatively impacted by olefin and polyethylene outages related to cold weather and maintenance activity as well as ethylene purchases and inventory build in preparation for the La Porte site turnaround. Collectively, these activities represented the majority of the EBITDA decline. Compared to the prior period, the olefins margin decreased slightly in part due to higher natural gas costs and the resulting increase in NGL feedstock prices. Polyethylene price increased by 3 cents per pound while sales volumes were relatively unchanged from the fourth quarter 2013. Polypropylene results and joint venture equity income were relatively unchanged.
Three months ended March 31, 2014 versus three months ended March 31, 2013 -- EBITDA declined $162 million versus the first quarter 2013. As noted above, maintenance activities coupled with preparation for the La Porte turnaround contributed to the lower results. An ethylene margin decline of 6 cents per pound impacted results by approximately $120 million. Polyethylene results increased primarily driven by a 9 cent per pound higher average price. Polypropylene results increased by approximately $30 million due to improved margins and 9 percent higher sales volumes. Joint venture equity income was relatively unchanged.
Olefins and 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 -------------------------------------- --------- ------------ --------- Three Months Ended ---------------------------------- March 31, December 31, March 31, Millions of U.S. dollars 2014 2013 2013 -------------------------------------- --------- ------------ --------- Operating income $225 $17 $93 -------------------------------------- --------- ------------ --------- EBITDA 356 115 225 -------------------------------------- --------- ------------ --------- |
