LyondellBasell Posts Quarterly Loss on Weak Demand for Chemicals

LyondellBasell Industries (NYSE: LYB) reported a net loss of $603 million, or $1.87 per share, for the fourth quarter of 2024, as weak demand for chemicals and higher raw material costs weighed on the company's financial performance. The specialty chemicals company's earnings missed analysts' expectations, and its shares fell in response to the news.

The company's earnings were impacted by several factors, including:

1. Weak demand for chemicals: LyondellBasell's results were affected by soft demand for chemicals, particularly in Europe, where operating rates at the company's crackers fell to 60% due to outages and lower demand. This weakness was driven by a recession in Europe, high inflation in the United States, and a slower-than-expected rebound in China's demand for chemicals.
2. Higher raw material costs: Increased costs for natural gas and NGL feedstocks, as well as lower product prices due to seasonally slower demand, contributed to the company's margin decline. Robust export demand for North American polyethylene offset some of the seasonal volume moderation in domestic markets, but sequentially higher ethane raw material costs led to lower integrated polyethylene margins.
3. Asset write-downs and refinery exit costs: LyondellBasell recognized non-cash asset write-downs related to its O&P Europe, Asia and International (O&P EAI) and Advanced Polymer Solutions (APS) segments, as well as costs incurred from plans to exit the refining business. These write-downs reflect the challenging market conditions for these businesses and include assets in the company's European strategic review and an Asian joint venture in the O&P EAI segment, as well as the Specialty Powders business in the APS segment.



LyondellBasell's full-year 2024 net income was $1.4 billion, or $4.15 per share, as the company recognized identified items of $734 million, net of tax. The company generated $3.8 billion in cash from operating activities during 2024, with approximately $1.8 billion reinvested in the business through capital expenditures and $1.9 billion returned to shareholders through quarterly dividends and share repurchases. LyondellBasell maintains a robust investment-grade balance sheet with $8.0 billion of available liquidity, including $3.4 billion of cash and cash equivalents, at year-end.



In conclusion, LyondellBasell's fourth-quarter and full-year 2024 results were impacted by weak demand for chemicals, higher raw material costs, and asset write-downs. Despite these challenges, the company generated strong cash from operating activities and maintained a robust balance sheet. As market conditions evolve, LyondellBasell will need to adapt its capital allocation strategy to remain competitive and drive long-term growth.