January 29, 2021

LyondellBasell Results

LyondellBasell Reports 2020 Earnings

HOUSTON and LONDON, Jan. 29, 2021 /PRNewswire/ —  

Full Year 2020 Highlights

Resilient Earnings

• Net Income: $1.4 billion, $1.9 billion excluding LCM and Impairment¹
• Diluted earnings per share: $4.24 per share, $5.61 per share excluding LCM and Impairment
• EBITDA: $3.3 billion, $3.9 billion excluding LCM and Impairment

Advanced Growth Initiatives

• Expanded polyethylene capacity with new 500 kt per year Hyperzone plant in Texas
• New joint ventures in China and Louisiana; both accretive to earnings in the fourth quarter
• Expanded circular polymers joint venture capacity by 20 kt in Belgium

Strong Cash Conversion and Dividends

• 88% conversion of EBITDA (excluding LCM and Impairment) to cash from operating activities
• Paid $4.20 per share in dividends; our tenth consecutive year of increasing total quarterly dividends

Fourth Quarter 2020 Highlights

• Net Income: $0.9 billion, $0.7 billion excluding LCM and Impairment
• Diluted earnings per share: $2.55 per share, $2.19 per share excluding LCM and Impairment
• Highest fourth quarter EBITDA since 2017: $1.4 billion, $1.3 billion excluding LCM and Impairment
• Refinanced $2.4 billion of debt to extend maturities and capture attractive interest rates
• Liquidity of $5.2 billion as of December 31, 2020

LyondellBasell Industries (NYSE: LYB) today announced net income for the fourth quarter 2020 of $0.9 billion, or $2.55 per share.  The quarter included a $147 million non-cash, lower of cost or market (LCM) inventory valuation benefit that increased net income by $119 million or $0.36 per share.  Fourth quarter EBITDA was $1.4 billion, or $1.3 billion excluding LCM. 

Full year 2020 net income was $1.4 billion, or $4.24 per share.  The full year results included a $582 million non-cash impairment charge related to the Houston refinery and $16 million of non-cash, LCM inventory valuation charges.  LCM and Impairment charges reduced full year 2020 net income by $457 million, or $1.37 per share.  Full year 2020 EBITDA was $3.3 billion, or $3.9 billion excluding LCM and impairment.  During 2020, costs for integration and restructuring impacted net income by $33 million or $0.10 per share.

“During 2020, LyondellBasell demonstrated financial and operational resilience against an extremely challenging backdrop of a global pandemic, the associated recession, volatile oil prices and significant capacity additions in our industry.  We moved swiftly to create a safe work environment for our employees and continuously supply customers with essential products throughout the pandemic.  Our strengths in operational excellence, cost management and capital discipline served us well as we quickly adapted to dynamic conditions by aggressively managing inventories, minimizing working capital and bolstering liquidity by rapidly accessing capital markets and efficiently generating cash.  LyondellBasell honored commitments to investors by both maintaining an investment grade credit rating and continuing to fund dividends and capital investments with cash from operations.  Taken together, these actions enabled us to successfully navigate a challenging year and remain focused on our strategy to build a stronger company for our stakeholders,” said Bob Patel, LyondellBasell CEO.

“During the fourth quarter, strong and persistent consumer-driven demand, industry supply constraints and continued recovery in durable goods markets reduced the impact of typical end-of-year slowdowns for our businesses.  During this period, we operated well and met robust demand for polyolefins used in consumer packaging and healthcare applications.  Margins improved for Olefins and Polyolefins, Propylene Oxide & Derivatives and Intermediate Chemicals businesses driven by higher demand and tight markets.  Rebounding automotive manufacturing drove increased volumes for our Advanced Polymer Solutions businesses.  The Refining and Oxyfuels & Related Products businesses continued to face headwinds from low global mobility resulting in stagnant demand for transportation fuels.”

“LyondellBasell nimbly managed the challenges of 2020 and our team advanced on our goal to create a stronger company for the longer term.  We expanded our participation in the rapidly growing Chinese market by forming a new integrated olefin and polyolefin joint venture with Bora.  In December, we expanded our manufacturing footprint on the U.S. Gulf Coast through the formation of an integrated polyethylene joint venture in Louisiana with Sasol.  Both joint ventures provided immediate benefits to our fourth quarter profitability without the project completion risks associated with the construction of greenfield projects.” 

“Our company remained focused on the substantive and ambitious goals outlined in our most recent Sustainability Report to develop circular and sustainable business models for our products.  We took action to advance our goals of annually producing and marketing two million tons of recycled and renewable-based polymers, including the start-up of our MoReTec molecular recycling pilot plant in Ferrara, Italy and the expansion of our mechanical recycling capacity in Europe through our Quality Circular Polymers joint venture with SUEZ.  We are dedicated to disciplined and sustainable growth that ensures our chemical and polymer products will continue to provide value for society,” Patel said.

OUTLOOK

“Improving trends seen in the closing weeks of December are continuing into the first quarter of 2021 and providing a bridge to the seasonal upticks typically seen in our businesses during the second and third quarters.  Elevated export demand to China and Latin America combined with tight markets are supporting strong margins for our Olefins and Polyolefins businesses.  Increased demand from automotive and construction markets has pushed the January order book for our Advanced Polymer Solutions segment to higher levels than the fourth quarter 2020 average.  With wider deployment of coronavirus vaccines, we anticipate that increasing mobility and transportation fuel demand could provide significant upside for our oxyfuels and refining businesses during the latter half of this year.”

“LyondellBasell’s measured approach to advancing value-driven growth is delivering results.  The Advanced Polymer Solutions platform is serving broader markets and beginning to capture the benefits from more than $200 million in synergies.  Our next-generation Hyperzone high-density polyethylene technology expanded our U.S. capacity and is establishing new benchmarks for differentiated product performance.  We formed two integrated cracker joint ventures that are quickly delivering accretive returns from high-quality assets benefiting from advantaged feedstocks and growing markets.  In January 2021, we continued on this strategy to form a new joint venture to build our second world-scale propylene oxide and styrene monomer unit in China.” 

“In the near term, the top priority for our balance sheet is debt reduction.  In January, we repaid $500 million of debt outstanding with more deleveraging planned for the remainder of 2021.  We are well-poised to harvest profitability from our disciplined growth initiatives that should increase free cash flow and allow us to further strengthen our investment grade balance sheet,” said Patel.

Intermediates & Derivatives (I&D)– Our I&D segment produces and markets Propylene Oxide & Derivatives, Oxyfuels & Related Products and Intermediate Chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.

Three months ended December 31, 2020 versus three months ended September 30, 2020 – EBITDA decreased $49 million versus the third quarter 2020, excluding a favorable $44 million variance due to LCM inventory benefits.  Results for the fourth quarter decreased approximately $70 million due to LIFO inventory changes relative to the prior quarter.  Compared to the prior period, Propylene Oxide & Derivatives results increased more than $25 million driven by higher margins due to strong Asia demand and market tightness.  Intermediate Chemicals results were relatively unchanged.  Oxyfuels & Related Products results decreased approximately $10 million driven by lower margins partially offset by an increase in volumes.  Margins declined due to higher butane feedstock prices and further weakening of gasoline spreads.

Three months ended December 31, 2020 versus three months ended December 31, 2019 – EBITDA decreased $133 million versus the fourth quarter 2019.  Results for the fourth quarter decreased approximately $55 million due to LIFO inventory changes relative to the prior quarter.  Propylene Oxide & Derivatives results increased approximately $40 million with improved margins and higher volumes due to strong Asia demand and market tightness.  Intermediate Chemicals results increased about $50 million driven by improved volumes and higher margins in most products, primarily styrene.  Volumes increased due to higher demand for most products and absence of planned maintenance in the fourth quarter 2019.  Oxyfuels & Related Products results decreased $175 million driven by lower margins due to reduced gasoline prices and lower octane blend premiums.

Full year ended December 31, 2020 versus full year ended December 31, 2019 – EBITDA decreased $714 million versus 2019, excluding an unfavorable $10 million variance due to LCM inventory charges in 2020.  Results for 2020 decreased approximately $40 million due to LIFO inventory changes relative to the prior year.  Propylene Oxide & Derivatives results decreased $15 million due to lower margins partially offset by higher volumes due to strong Asia demand.  Intermediate Chemicals results decreased about $185 million driven by margin declines in most businesses.  Oxyfuels & Related Products decreased approximately $465 million with a significant decrease in margins driven by reduced gasoline prices and lower octane blend premiums. 

https://lyondellbasell.mediaroom.com/index.php?s=43&item=1357

January 28, 2021

Dow Increases Polyol Prices Again in February

January 27, 2021

Polyol PRICE INCREASE

Effective February 15, 2021, or as contracts allow, The Dow Chemical Company, on behalf of itself and its applicable consolidated subsidiaries (“Dow”), will increase off-list prices by the amounts listed below on all grades and package types of the following Polyol products in North America:

VORANOL US $0.10 / lb
VORALUX US $0.10 / lb
SPECFLEX US $0.10 / lb

Thank you for your continued business with Dow. Please contact your Account Manager if you have any questions related to this communication.

January 28, 2021

Dow Increases Polyol Prices Again in February

January 27, 2021

Polyol PRICE INCREASE

Effective February 15, 2021, or as contracts allow, The Dow Chemical Company, on behalf of itself and its applicable consolidated subsidiaries (“Dow”), will increase off-list prices by the amounts listed below on all grades and package types of the following Polyol products in North America:

VORANOL US $0.10 / lb
VORALUX US $0.10 / lb
SPECFLEX US $0.10 / lb

Thank you for your continued business with Dow. Please contact your Account Manager if you have any questions related to this communication.

January 28, 2021

Dow Q4 Results

Dow reports fourth quarter 2020 results; Double Digit Sales Growth in Polyurethanes

Thu January 28, 2021 6:00 AM|Business Wire|About: DOW

MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):

FINANCIAL HIGHLIGHTS

• GAAP earnings per share was $1.65; Operating EPS¹ was $0.81, excluding significant items in the quarter totaling $0.84 per share, primarily related to a gain on the sale of certain U.S. Gulf Coast marine and terminal operations and assets, as well as a gain associated with a legal matter.
• Net sales were $10.7 billion, up 5% versus the year-ago period, with increased local prices, currency and volume. Dow’s fourth quarter sales increased 10% versus the prior quarter as the global economic recovery continued.
• Local price increased 2% versus the year-ago period, primarily driven by improved pricing in polyethylene and polyurethane applications. Currency increased sales by 2%. Sequentially, price increased 8% with improvements in all segments.
• Volume increased 1% versus the year-ago period, reaching pre-pandemic volume levels in all operating segments. The year-over-year increase was led by demand growth in Packaging & Specialty Plastics and Performance Materials & Coatings. Compared to the prior quarter, volume increased 2% with gains in Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and in all regions, driven by strong supply and demand fundamentals.
• Equity earnings were $106 million, up $127 million compared to the year-ago period, primarily driven by continued improvement in financial results at the Sadara joint venture.
• GAAP Net Income was $1.3 billion. Operating EBIT¹ was $1.1 billion, up from $1.0 billion in the year-ago period due to margin expansion in polyethylene and polyurethane applications.
• Cash provided by operating activities – continuing ops. was $1.7 billion and free cash flow¹ was $1.4 billion. Working capital was a $236 million source of cash despite increased sales. Free cash flow for the year was $5 billion, up $1.2 billion over the prior year. Cash conversion¹ in the quarter was 93%, leading to a full-year rate of 112%, a 30% improvement over the prior year.
• Dividend returns to shareholders totaled $519 million in the quarter.
• Total cash and available committed liquidity at quarter-end was $14.6 billion, an increase of $3.9 billion over the year-ago period.
• Net debt¹ was reduced by $837 million in the quarter, resulting in a total net debt improvement of more than $2.6 billion in 2020. The Company continues to have no substantive long-term debt maturities due until the second half of 2024.
• Dow completed the sale of select U.S. Gulf Coast marine and terminal operations and assets, receiving cash proceeds of $620 million in the quarter.
• Sadara reached agreement in principle on key terms for its debt reprofiling with all remaining lenders in January 2021, supporting the joint venture’s path toward cash flow self-sufficiency.

CEO QUOTE

Jim Fitterling, Dow’s chairman and chief executive officer, commented on the quarter:

“The Dow team delivered top- and bottom-line growth in the fourth quarter, reaching pre-pandemic levels across most businesses as the economic recovery continued to gain traction. Our consumer-led portfolio and ongoing focus on capturing demand drove year-over-year volume growth in every region and segment, as well as sequential price and margin expansion across the portfolio.

“We delivered free cash flow of $5 billion for the year, and further improved our cash conversion rate by 30 percent. This focus on cash flow generation, coupled with our execution of key strategic cash levers such as the sale of select U.S. Gulf Coast marine and terminal assets, enabled additional deleveraging in the quarter as we reduced total net debt by more than $2.6 billion for the year. And we also achieved a significant milestone for Sadara by reaching agreement in principle with the lenders on its debt reprofiling. This was a strong finish to a year where the Dow team capably overcame significant macroeconomic and other external challenges. I am confident about our path forward for 2021 and beyond.”

Industrial Intermediates & Infrastructure net sales were $3.5 billion, up 8% versus the year-ago period. Local price improved 6%, primarily driven by significant increases in consumer goods and appliances. Currency increased net sales by 2%. Volume was resilient with growth from strong construction and durable goods demand, offset by downward pressure from supply limitations. On a sequential basis, the segment recorded a net sales increase of 14%, driven by significant price improvement in polyurethanes and robust demand in Industrial Solutions in line with the macroeconomic recovery.

Equity earnings for the segment were $36 million, an increase of $81 million compared to equity losses of $45 million in the year-ago period, driven by margin expansion at Sadara.

Operating EBIT was $296 million, compared to $221 million in the year-ago period due to strong supply and demand fundamentals in Polyurethanes & Construction Chemicals and at Sadara. Sequentially, the segment increased Op. EBIT by $192 million driven by significant improvement in margin-over-raw material costs across both businesses.

Polyurethanes & Construction Chemicals reported a double-digit net sales increase compared to the year-ago period, primarily due to significantly higher local prices in polyurethane applications, with improvements in all regions except Latin America. Demand recovery in Europe, Middle East, Africa and India (EMEAI) and Latin America, particularly in construction and consumer durables, was more than offset by lower supply volumes from planned and unplanned maintenance, weak demand for aircraft de-icing fluids, and reduced participation in select markets. And sequentially, the business delivered double-digit sales growth, driven by strong local pricing in all regions, as well as in furniture & bedding and appliance end markets.

https://seekingalpha.com/pr/18168733-dow-reports-fourth-quarter-2020-results

January 28, 2021

Dow Q4 Results

Dow reports fourth quarter 2020 results; Double Digit Sales Growth in Polyurethanes

Thu January 28, 2021 6:00 AM|Business Wire|About: DOW

MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):

FINANCIAL HIGHLIGHTS

• GAAP earnings per share was $1.65; Operating EPS¹ was $0.81, excluding significant items in the quarter totaling $0.84 per share, primarily related to a gain on the sale of certain U.S. Gulf Coast marine and terminal operations and assets, as well as a gain associated with a legal matter.
• Net sales were $10.7 billion, up 5% versus the year-ago period, with increased local prices, currency and volume. Dow’s fourth quarter sales increased 10% versus the prior quarter as the global economic recovery continued.
• Local price increased 2% versus the year-ago period, primarily driven by improved pricing in polyethylene and polyurethane applications. Currency increased sales by 2%. Sequentially, price increased 8% with improvements in all segments.
• Volume increased 1% versus the year-ago period, reaching pre-pandemic volume levels in all operating segments. The year-over-year increase was led by demand growth in Packaging & Specialty Plastics and Performance Materials & Coatings. Compared to the prior quarter, volume increased 2% with gains in Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and in all regions, driven by strong supply and demand fundamentals.
• Equity earnings were $106 million, up $127 million compared to the year-ago period, primarily driven by continued improvement in financial results at the Sadara joint venture.
• GAAP Net Income was $1.3 billion. Operating EBIT¹ was $1.1 billion, up from $1.0 billion in the year-ago period due to margin expansion in polyethylene and polyurethane applications.
• Cash provided by operating activities – continuing ops. was $1.7 billion and free cash flow¹ was $1.4 billion. Working capital was a $236 million source of cash despite increased sales. Free cash flow for the year was $5 billion, up $1.2 billion over the prior year. Cash conversion¹ in the quarter was 93%, leading to a full-year rate of 112%, a 30% improvement over the prior year.
• Dividend returns to shareholders totaled $519 million in the quarter.
• Total cash and available committed liquidity at quarter-end was $14.6 billion, an increase of $3.9 billion over the year-ago period.
• Net debt¹ was reduced by $837 million in the quarter, resulting in a total net debt improvement of more than $2.6 billion in 2020. The Company continues to have no substantive long-term debt maturities due until the second half of 2024.
• Dow completed the sale of select U.S. Gulf Coast marine and terminal operations and assets, receiving cash proceeds of $620 million in the quarter.
• Sadara reached agreement in principle on key terms for its debt reprofiling with all remaining lenders in January 2021, supporting the joint venture’s path toward cash flow self-sufficiency.

CEO QUOTE

Jim Fitterling, Dow’s chairman and chief executive officer, commented on the quarter:

“The Dow team delivered top- and bottom-line growth in the fourth quarter, reaching pre-pandemic levels across most businesses as the economic recovery continued to gain traction. Our consumer-led portfolio and ongoing focus on capturing demand drove year-over-year volume growth in every region and segment, as well as sequential price and margin expansion across the portfolio.

“We delivered free cash flow of $5 billion for the year, and further improved our cash conversion rate by 30 percent. This focus on cash flow generation, coupled with our execution of key strategic cash levers such as the sale of select U.S. Gulf Coast marine and terminal assets, enabled additional deleveraging in the quarter as we reduced total net debt by more than $2.6 billion for the year. And we also achieved a significant milestone for Sadara by reaching agreement in principle with the lenders on its debt reprofiling. This was a strong finish to a year where the Dow team capably overcame significant macroeconomic and other external challenges. I am confident about our path forward for 2021 and beyond.”

Industrial Intermediates & Infrastructure net sales were $3.5 billion, up 8% versus the year-ago period. Local price improved 6%, primarily driven by significant increases in consumer goods and appliances. Currency increased net sales by 2%. Volume was resilient with growth from strong construction and durable goods demand, offset by downward pressure from supply limitations. On a sequential basis, the segment recorded a net sales increase of 14%, driven by significant price improvement in polyurethanes and robust demand in Industrial Solutions in line with the macroeconomic recovery.

Equity earnings for the segment were $36 million, an increase of $81 million compared to equity losses of $45 million in the year-ago period, driven by margin expansion at Sadara.

Operating EBIT was $296 million, compared to $221 million in the year-ago period due to strong supply and demand fundamentals in Polyurethanes & Construction Chemicals and at Sadara. Sequentially, the segment increased Op. EBIT by $192 million driven by significant improvement in margin-over-raw material costs across both businesses.

Polyurethanes & Construction Chemicals reported a double-digit net sales increase compared to the year-ago period, primarily due to significantly higher local prices in polyurethane applications, with improvements in all regions except Latin America. Demand recovery in Europe, Middle East, Africa and India (EMEAI) and Latin America, particularly in construction and consumer durables, was more than offset by lower supply volumes from planned and unplanned maintenance, weak demand for aircraft de-icing fluids, and reduced participation in select markets. And sequentially, the business delivered double-digit sales growth, driven by strong local pricing in all regions, as well as in furniture & bedding and appliance end markets.

https://seekingalpha.com/pr/18168733-dow-reports-fourth-quarter-2020-results