UpdateWesseling turnaround drives down LyondellBasell Q3 earnings

26 October 2012 15:33  [Source: ICIS news]

(adds update on third-quarter results throughout)

LONDON (ICIS)--A period of turnaround at LyondellBasell's Wesseling facility in Germany is behind a $172m (€132m) drop in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the group's European and Asian olefins division in the third quarter, the company said on Friday.

The turnaround caused EBITDA for LyondellBasell’s olefins and polyolefins – Europe, Asia, International (O&P – EAI) division to fall to $75m during the quarter, down from $247m in the third quarter of 2011 and down $260m from the $335m generated in the second quarter of 2012, the Netherlands-headquartered petrochemicals producer said.

Although mitigated by the performance of its O&P Americas and intermediates and derivatives (I&D) units, both of which beat prior quarter-on-quarter and year-on-year earnings levels, the performance of the O&P EAI division was the main cause of a 5.7% fall in net income year on year for the third quarter, according to the company.

The Wesseling facility may complete turnaround next quarter, according to company chairman Jim Gallogly.

“We have one of our German crackers and a US PO/TBA [polypropylene oxide andtertiary butyl alcohol] plant finishing turnarounds during the [next] quarter,” he said.

O&P Americas generated EBITDA of $820m during the quarter, up $148m year on year, while the I&D unit generated EBITDA of $475m, up $58m on the corresponding quarter in 2011.

The company is currently looking to take advantage of strong olefins and polyolefins demand in the Americas by increasing the efficiency of its production, according to Gallogly.

“We have initiated a review of additional olefins debottleneck projects targeted to capitalise on the advantage of favourable North American NGL [natural gas liquids] prices," he said.

With EBITDA of $150m during the third quarter, earnings for the company’s refining operations were down $11m on the previous quarter and down $277m on the third quarter of 2011, which the company attributed to a 29,000 barrels/day throughput decline, and less opportunity to purchase discounted crude oils.

($1 = €0.77)

By: Tom Brown
+44 208 652 3214

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