LyondellBasell Industries N.V. (LYB) shares took a dip in pre-market trading on Friday after the company reported third-quarter results that fell short of analysts’ expectations. Revenue for the quarter came in at $10.332 billion, a 2.8% decline year-over-year and missing the consensus estimate of $10.601 billion. Adjusted EBITDA also took a hit, landing at $1.21 billion, down 14.1% year-over-year, with a margin contraction of 154 basis points to 11.7%. Adjusted earnings per share (EPS) stood at $1.88, below the consensus of $1.98.
Despite the disappointing overall results, LyondellBasell highlighted some positive developments. North American polyethylene margins saw an increase due to lower ethane and gas costs, with demand rising over 7% year-to-date. High cracker operating rates boosted third-quarter ethylene volumes, while Europe and Asia margins benefited from lower feedstock costs.
The company generated a strong $670 million in operating cash flow during the third quarter, achieving an 80% cash conversion rate over the past 12 months. LyondellBasell invested $368 million in capital expenditures, returned $479 million to shareholders, and maintained a healthy cash position of $2.6 billion with a total liquidity of $7.3 billion.
Looking ahead, LyondellBasell anticipates a softer demand environment in the fourth quarter due to seasonal factors. Higher natural gas and ethane feedstock costs are likely to impact North American integrated polyolefins margins. Operating rates are projected at 85% for North American O&P assets, 60% for European O&P, and 75% for I&D assets. The company remains optimistic about durable goods demand in 2025, expecting easing interest rates to fuel growth.
CEO Peter Vanacker highlighted the company’s focus on sustainability, noting the commencement of construction on its new MoReTec-1 facility in Germany. This project signifies a key step toward a more sustainable future for LyondellBasell.
“Despite challenging global macroeconomic conditions, our strong North American operations allowed us to capitalize on favorable ethylene margins in the region,” said Vanacker.
LyondellBasell’s shares were down 0.98% at $86.00 in pre-market trading on Friday. While the company faces headwinds in the near term, its commitment to sustainability, strong cash flow generation, and positive outlook for durable goods demand provide some optimism for investors moving forward.
