31 January 2014 13:40 [Source: ICIS news]
(updates with division results, outlook)
LONDON (ICIS)--A substantial year on year jump in LyondellBasell’s olefins and polyolefins earnings across the Americas in the fourth-quarter of 2013 helped to drive an 89% increase in net income for the period, the Netherlands-registered chemicals producer said on Friday.
The company’s net income for the quarter was $1.18bn compared to $623m for the same quarter in 2012, and also represents a 38% increase on the $851m net income posted in the third-quarter of 2013, LyondellBasell added.
Sales were up slightly year on year for the quarter at $11.1bn, while earnings before interest taxes, depreciation and amortisation (EBITDA) rose 22% year on year during the quarter to $1.54bn, which the company said was achieved in spite of seasonal slowdowns.
The company also noted a strong performance for its intermediates and derivatives divisions during the quarter and for 2013 as a whole.
“During the quarter, we completed the methanol restart project at Channelview, Texas. This project and other announced projects focus on capturing additional advantages from US shale gas ahead of our competition,” said LyondellBasell CEO Jim Gallogly.
Gallogly added that the company’s plant in La Porte, Texas, wouold undergo an olefins turnaround late in the first quarter of 2014, adding that the company purchased additional ethylene stocks towards the end of 2013 to build up inventory in preparation for the unit’s turnaround and expansion. The turnaround is expected to be completed in the second quarter of the year.
The company’s Americas olefins and polyolefins operations posted operating income of $801m for the quarter compared to $693m in the fourth-quarter 2012, as a result of lower ethylene production costs due to higher ethane cracking. Ethane represented 77% of ethylene production, the company added.
By contrast, the European, Asia and international olefins and polyolefins division generated operating income of $17m, an increase on the $94m operating loss posted in the fourth quarter of 2012, but down 78% from the third quarter of 2013.
Division results benefited from a $25m payment related to an insurance settlement, and polyolefin earnings benefited from higher volumes more than offsetting a 6% year on year decline in sales volumes.
Intermediates and derivatives operating income was also up, jumping 30% year on year during the fourth quarter of 2013, driven by higher margins and sales volumes for intermediate chemicals styrene, acetyls and ethylene glycol.
Refining operating income was up 7% year on year at $92m, due to improved refinery margins driven by more favourable by-product spreads, while technology division operating income was up 43% as a result of the absence of charges related to research and restructuring activities, the company said.
The company’s position is likely to continue to strengthen into 2014, according to Gallogly.
He said, “"The fundamentals supporting our businesses have remained strong... [and] we believe olefins in North America will continue to benefit from strong margins created by cost-advantaged NGLs.
“European olefins and polyolefins demand should improve from a seasonally-low fourth quarter. Intermediates and Derivatives continues to realize solid, steady performance and will additionally benefit from the methanol restart,” he added.
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