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LyondellBasell’s 1Q net income up 18.3% on stronger margins
HOUSTON, April 27, 2018 (PCW) –- LyondellBasell on Friday announced 1Q net income of about $1.9 billion, up 18.3% from the the nearly $1.62 billion reported a year ago. The increase was due to stronger margins and robust global polyethylene demand, the company said.
CEO Bob Patel said in an earnings call Friday that lower US ethylene prices and resulting softer margins have negatively impacted 1Q earnings by $75 million. He noted ethylene margins fell about 2 cpp due to reduced operating rates from derivative units. Operating rates of the company’s ethylene units averaged around 90% during the quarter.
Unseasonably cold weather in late January and resulting operational hiccups in the US resulted in a negative impact of $45 million on 1Q earnings as well. The ongoing planned turnaround at the Channelview facility also had a negative impact of some $50 million on 1Q earnings. Patel noted that while that turnaround is nearing completed, its continuance into 2Q would impact earnings during that quarter by some $50 million.
Providing an update on its US infrastructure projects, the company said construction is proceeding as planned on its new Hyperzone PE plant in La Porte and start-up is still expected to be in 1Q 2019. The company also plans to break ground on its new propylene oxide/ tertiary butyl alcohol plant at Channelview this summer. The plant is expected to come online in 2021.
Patel said that final investment decisions on possible PDH and PP units in North America in early 2019.
LyondellBasell’s Americas olefins and polyolefins segment reported 1Q EBITDA of $780 million, up from $723 million seen in 1Q 2017. Combined polyolefins results increased by about $155 million from the year-ago period due to PE and PP spread improvements of about 11 cpp and 5 cpp, respectively, the company said. -- Samantha Hartke