MOSCOW (MRC) -- LyondellBasell's (Houston, Texas) Q4, 2021 net income came to USD726 million, down 15% year over year from USD855 million largely because a USD624-million noncash impairment charge related to the Houston refinery reduced net income by USD481 million, as per the company's press release.
Sales totaled USD12.830 billion, up 62% YOY from USD7.937 billion. Adjusted earnings per share came to USD3.63, up 66% YOY from USD2.19 but short of the consensus estimate of USD3.96 compiled by Zacks Investment Research.
LBI reports strong polyolefin pricing and volume during the fourth quarter of 2021, but also high feedstock and energy costs as well as depressed demand into applications affected by semiconductor shortages.
"With forecasts for above-average GDP growth in 2022, we expect continued strength in demand for our products,” says Ken Lane, LyondellBasell interim CEO. “We are closely monitoring rising feedstock and energy costs, particularly at our European operations. Elevated levels of ethylene industry maintenance activities scheduled for the first half of 2022 are likely to constrain supply. We expect tight markets for acetyls, and propylene oxide will continue to drive strong profitability within our [intermediates and derivatives] segment. In January, our advanced polymers solutions segment benefited from increased order volumes for our products used in automotive production."
The olefins and polyolefins - Americas segment turned in adjusted EBITDA of USD1.262 billion, up 75% YOY from USD722 million on higher margins. Olefin margins widened as ethylene and propylene prices outpaced rising feedstock and energy costs, while ethylene volumes declined as inventories were built in preparation for planned maintenance in the first quarter, says the company. Polyolefins pricing increased faster than monomer pricing.
The olefins and polyolefins - Europe, Asia, international segment turned in adjusted EBITDA of USD155 million, down 38% YOY from USD251 million. Olefins margins declined as higher feedstock and energy costs were only partially offset by increased ethylene and propylene prices. Volumes declined owing to planned maintenance. Polyolefins margins increased as strong demand and tight markets drove spreads higher, offsetting increased energy costs.
The intermediates and derivatives segment reported adjusted EBITDA of USD252 million, up 29% YOY from USD196 million despite USD40 million in unfavorable LIFO inventory valuation charges. Propylene oxide and derivatives margins increased owing to strong Asian demand and market tightness, partially offset by high energy costs and lower volumes. Intermediate chemicals margins increased on higher pricing, partially offset by higher feedstock costs, while volumes decreased owing to planned and unplanned maintenance. Oxyfuels and related products margins declined primarily because of higher feedstock butane prices.
The advanced polymer solutions segment turned in adjusted EBITDA of USD24 million, down 81% YOY from USD126 million, in part because of USD60 million in LIFO inventory valuation charges. The balance reflects lower volumes driven by constrained production in automotive, appliance, and other end markets affected by semiconductor shortages.
Adjusted EBITDA in the refining segment totaled USD150 million, up from a loss of USD74 million in the year-ago period, reflecting LIFO inventory valuation benefits, higher margins, and higher volume. Adjusted EBITDA in the technology segment totaled USD173 million, up 284% YOY from USD45 million on increased licensing revenue and catalyst volume.
As MRC informed before, LyondellBasell Industries said its Houston refinery would be a better fit with a larger oil processing company and that a sales effort continues.
We remind htat in July, 2021, Neste and LyondellBasell announced a long-term commercial agreement under which LyondellBasell will source Neste RE, a feedstock from Neste that has been produced from 100% renewable feedstock from bio-based sources, such as waste and residue oils and fats. This feedstock will be processed through the cracker at LyondellBasell’s Wesseling, Germany, plant into polymers and sold under the CirculenRenew brand name.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
Neste (Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. The company is the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. In 2020, Neste's revenue stood at EUR11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products.
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