MOSCOW (MRC) -- LyondellBasell Industries, the world’s biggest maker of polypropylene (PP) plastic, has announced earnings from continuing operations for the third quarter 2014 of USD1.3 billion, or USD2.46 diluted earnings per share, as per the company's report.
Third quarter 2014 EBITDA was USD2.0 billion. The quarter includes a USD45 million non-cash charge for the impact of a lower of cost or market (LCM) inventory adjustment. The increase from the second quarter 2014 was primarily due to increased earnings in our Olefins and Polyolefins - Americas segment.
"We are pleased to deliver a second consecutive quarter of record earnings, and our best quarter ever. During the third quarter we achieved diluted earnings per share from continuing operations of USD2.46 and, for the first time, EBITDA exceeded USD2 billion. Our Olefins and Polyolefins- Americas segment generated EBITDA in excess of USD1.1 billion during the quarter. A tight US ethylene market helped drive the record earnings," said Jim Gallogly, LyondellBasell Chief Executive Officer.
"In addition to our strong earnings, we continue to return cash to our shareholders. During the quarter, dividends and share repurchases totaled USD1.6 billion. We repurchased approximately 12 million shares during the third quarter, and approximately 46 million shares year to date. Since the first share repurchase program was started in May 2013, we have repurchased approximately 73 million shares, or approximately 13 percent of the shares outstanding," continued Gallogly.
"Industry fundamentals remained strong during the quarter, and we continue to make progress on our investment program. Late in the quarter we initiated production from the 800 million pound per year La Porte ethylene expansion. This is the first of multiple ethylene expansions by the company, putting us well ahead of new greenfield plants pursued by others in the industry. In addition, we announced the development of two new growth projects, a further expansion of our Channelview olefins complex and a new US Gulf Coast PO/TBA plant. Both projects take advantage of the favorable environment for North American raw materials, and the PO/TBA plant leverages our proprietary technology. These projects demonstrate that LyondellBasell has continued organic growth opportunities," Gallogly added.
"Despite declines in crude oil prices, US industry fundamentals remained favorable through the first weeks of October. Domestic ethylene and polyolefins pricing remained strong, and we continued to benefit from favorable NGL pricing. Our fourth quarter results should be favorably impacted by the new La Porte ethylene capacity. Additionally, our refinery should begin receiving shipments of Canadian crude from the Flanagan South pipeline. However, we historically experience margin compression in products such as oxyfuels in winter months and slower polyolefin demand around the holiday season. Recent crude oil price declines are expected to ultimately impact domestic margins but today's tight market conditions may delay the timing of potential declines. We are watching to see how this develops. Given favorable NGL prices, our domestic assets remain significantly advantaged," Gallogly noted.
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were USD338 million in the third quarter 2014. Our cash and short-term securities balance was USD2.9 billion at September 30, 2014. We repurchased approximately 12 million of our outstanding ordinary shares and paid USD358 million in dividends during the third quarter of 2014. There were 504 million common shares outstanding as of September 30th.
As MRC wrote before, LyondellBasell Industries said "tight" markets for its products may stall the narrower margins that it expects will ultimately come from lower oil prices.
LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.