LyondellBasell reported second-quarter net income of $203 million, excluding a net $8.6 billion after-tax gain on the discharge of liabilities subject to compromise and fresh-start accounting adjustments.
Sales were up 7.2%, to $10.4 billion. Excluding reorganization items and a $333 million non-cash lower of cost or market inventory charge, second-quarter 2010 earnings before interest, income taxes, depreciation and amortization,and restructuring costs (Ebitdar) was $1.4 billion.
"We emerged from Chapter 11 as a much stronger company," says Jim Gallogly, CEO of LyondellBasell. "The second quarter was an excellent start for our new company. Strong U.S. ethylene margins experienced late in the first quarter continued into the second quarter. Our feedstock flexibility and reliable operations, coupled with the leverage of our sizeable portfolio, resulted in improved earnings."
Operating income in the company's olefins & polyolefins/Americas segment was $324 million, up 123% from the year-ago quarter on higher average ethylene selling prices and decreased ethylene production costs. However, total polyolefins sales volumes decreased about 3% versus the second quarter 2009 on reduced polyethylene sales, partially related to a turnaround at the company's Morris, IL facility, accounted for the majority of the volume decrease, LyondellBasell says.
The olefins & polyolefins/Europe, Asia and International segment posted operating income of $158 million, up 122% from the year-ago quarter on improved margins and volume growth in polypropylene and polypropylene compounding, due in large part to increased demand from the automotive sector.
The company's intermediates and derivatives business reported operating income of $143 million, up 16% from the second-quarter 2009 due to higher sales volumes and lower fixed costs. Meanwhile the refining and oxyfuels segment posted operating income of $43 million, compared to a loss of $128 million for the year-ago period. "At the Houston refinery, an increase in the industry benchmark margin of approximately $8/bbl more than offset a crude volume decline of 42,000 bpd," LyondellBasell says. The company's Berre, France refinery results also improved as a result of an increase in the industry benchmark margin of approximately $2/bbl, while oxyfuels results declined from the second quarter 2009 due to lower margins.
Looking forward, the company expects the U.S. ethylene market to rebalance following several turnarounds and unplanned industry outages in the second quarter. In Europe, unplanned industry outages have resulted in improved olefin plant co-product margins, the company says. "We took advantage of supply-driven market tightness in several of our businesses during the first half of the year," Gallogly says. "However, our view is that the long-term fundamentals have not changed appreciably. The rates at which the world economy recovers and new capacity comes online in the Mideast and Asia will significantly influence operating rates and margins going forward."
Sales were up 7.2%, to $10.4 billion. Excluding reorganization items and a $333 million non-cash lower of cost or market inventory charge, second-quarter 2010 earnings before interest, income taxes, depreciation and amortization,and restructuring costs (Ebitdar) was $1.4 billion.
"We emerged from Chapter 11 as a much stronger company," says Jim Gallogly, CEO of LyondellBasell. "The second quarter was an excellent start for our new company. Strong U.S. ethylene margins experienced late in the first quarter continued into the second quarter. Our feedstock flexibility and reliable operations, coupled with the leverage of our sizeable portfolio, resulted in improved earnings."
Operating income in the company's olefins & polyolefins/Americas segment was $324 million, up 123% from the year-ago quarter on higher average ethylene selling prices and decreased ethylene production costs. However, total polyolefins sales volumes decreased about 3% versus the second quarter 2009 on reduced polyethylene sales, partially related to a turnaround at the company's Morris, IL facility, accounted for the majority of the volume decrease, LyondellBasell says.
The olefins & polyolefins/Europe, Asia and International segment posted operating income of $158 million, up 122% from the year-ago quarter on improved margins and volume growth in polypropylene and polypropylene compounding, due in large part to increased demand from the automotive sector.
The company's intermediates and derivatives business reported operating income of $143 million, up 16% from the second-quarter 2009 due to higher sales volumes and lower fixed costs. Meanwhile the refining and oxyfuels segment posted operating income of $43 million, compared to a loss of $128 million for the year-ago period. "At the Houston refinery, an increase in the industry benchmark margin of approximately $8/bbl more than offset a crude volume decline of 42,000 bpd," LyondellBasell says. The company's Berre, France refinery results also improved as a result of an increase in the industry benchmark margin of approximately $2/bbl, while oxyfuels results declined from the second quarter 2009 due to lower margins.
Looking forward, the company expects the U.S. ethylene market to rebalance following several turnarounds and unplanned industry outages in the second quarter. In Europe, unplanned industry outages have resulted in improved olefin plant co-product margins, the company says. "We took advantage of supply-driven market tightness in several of our businesses during the first half of the year," Gallogly says. "However, our view is that the long-term fundamentals have not changed appreciably. The rates at which the world economy recovers and new capacity comes online in the Mideast and Asia will significantly influence operating rates and margins going forward."
