LONDON (ICIS)--LyondellBasell has halted several plants for advanced polymers and reduced rates across the board due the sharp fall in demand, the chemicals major said on Friday as it reported a fall of 82% in first-quarter net income, year on year.
Earnings before interests, taxes, depreciation and amortisation (EBITDA) for the quarter more than halved.
The company said its olefins and polyolefins division had weathered the storm slightly better than other segments, but net income and EBITDA in that division also fell sharply.
“Automotive manufacturing shutdowns diminished typical seasonal improvements for our Advanced Polymer Solutions [APS] segment where more than one third of the segment's product volumes are utilised in the automotive sector,” said the firm.
“In response, we have temporarily halted production at several relatively small plants in our APS segment.”
It added that its “major facilities” are all operating but it has reduced rates “across our system to match” sharply lower demand.
Amid a set of results that foretell the hardship to come in the second quarter, the company said capital expenditure (capex) for 2020 would be cut by $500m and said it had increased its access to liquidity to more than $5bn during April.
“In the event of a prolonged or deeper downturn, we will act pragmatically and evaluate all prudent options,” said LyondellBasell’s CEO Bob Patel.
“While it is too early to predict the magnitude and duration of the downturn, we entered this crisis from a position of strength and we believe we are well-positioned to navigate this volatile environment and prepare the company for an eventual recovery of the economy."
|LyondellBasell ($/m)||Q1 2020||Q1 2019||Change|
Net income in the fourth quarter of 2019 stood at $612m.
Front page picture: A lone employee at a
check-in desk at McCarran International airport
in Las Vegas, in April
Source: John Locher/AP/Shutterstock