LYB - Earnings call transcript Q1 2022 | LyondellBasell Industries N.V.

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Operator

Hello, and welcome to the LyondellBasell teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. [Operator Instructions]. I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. begin. may you Sir,

David Kinney

Alex. you, Thank

will subject we assumptions non-GAAP begin out and like that website. are significant investors. point forward-looking based learn some Today, to Nonetheless, I also our cautionary available the while are business making uncertainty. statements slides at reference the measures. the the the a measures slide We encourage discussion, to risk actual we Investor www.lyondellbasell.com/investorrelations. statements reviewing that alternative useful We at presentation are statements and call statements our available our and would are discussing presentation our to on results and and more forward-looking about to forward-looking could website results to Before you regulatory reasonable to be our which financial accompanies is in Relations by the the differ factors upon today's lead believe filings,

States Investor of results discussion. disclosures, United by both p.m. be of until website release XXX-XXX-XXXX business including XX our Additional other today documents call will at and this provide the with measures on the non-GAAP to A financial XXXXXXXX. together calling is reconciliations and our numbers States. the earnings measures, United GAAP financial available XXX-XXX-XXXX X Eastern outside The May access in for by beginning telephone Time recording code

results, and we the During near-term market on quarter current today's call, will first focus outlook. our

the to our have in last prices the to the out turning adjustments, related LCM, first and market lower LIFO materials that or were would inventories. be fourth impairment the call to the finished are we of inventory and adjustments goods call I on inventory Comments for reflects that being Before to made to like like quarter and regard options the call their the recognized our in $XXX value. or charges turn underlying Ken. of in, strategic your to Impairments Impairment volatility our LCM refinery. impairments use write that evaluation of adjustments. over accounting to noncash discussed attention our of to of said, million in fair the estimated Houston include raw results, call With of XXXX excluding I assets past this to noncash down Ken, or on the LCM over calls. impairments will now in business would impacts cost for

Kenneth Lane

Today's our you, our all you few thank We XXXX quarter welcome results. interim Dave, my would the I second CEO lead us earnings as call company first the to months. you. to of teleconference appreciate we as Directors for to joining the over LyondellBasell. opportunity and like marks discuss past Thank today of And of Board the

looking joined our Officer Peter with engage that a to the build of company. help us employees, have to our very our we're Executive several and CEO, XX. Our successful leadership smooth transition on Vanacker, to investors LyondellBasell. incoming February is and May in have on I to I start we him role know talking Peter suppliers a past underway Board over forward assuming customers, been his the ensure and to months his momentum eager and XX, Chief upon as Peter

XXXX and have of the attacks Before into many limited. seeing Commissioner address The LyondellBasell not we unfolding new the to Medical would LyondellBasell, Russia Corp. revenue of crisis. devastated state-owned get enter Ukraine International LyondellBasell's Russia presence collectively is breaks and came that to are than United we tragic Good. address fairly our from more a March, resulting Nations will and our In global humanitarian Russian through so Ukraine. negligible a I crisis Refugees amount Ukraine. any our in the Advancing from we to than with impacts the the moment transactions heart corporate into $XXX,XXX At take for announced working to relationships business people High My entities. employees like donated citizenship and this and company results, the X.X% in unprovoked program, and Less or

intend with also to We legally relationships companies discontinue to extent business the those possible.

Of complying international all U.S. course, also we are and with sanctions.

difficult no offices do we have employees in or in While Russia. Ukraine, made we cease Russia Last at working Togliati we offices. our operations about Moscow manufacturing the XX sites decision have to week, and in

period. and local across the ways have team Ukrainian we in hope At support peace to of a to Europe. We of place believe in transition stability influence many find the many, people during we power LyondellBasell, and this employees and our support you

let's and Derivatives segment. Now demand starting solid improving businesses to results, Slide are from LyondellBasell's quarter Intermediates products with X. benefit and for our review continuing first from markets global our

backdrop of and the since quarter, income of start is seasonally first energy the operating the and typically petrochemical challenges, XXXX. EBITDA record cash LyondellBasell start to per where a During marks billion of share per earnings, The XXXX share LyondellBasell our $X per earnings quarter, year first for for new great first LyondellBasell EBITDA $X of geopolitical off activities. generated supply $X.X the in of Despite billion and volatile time slow first uncertainties, during share company. establishes of prices a chain $X a period earned from a of XXXX for the quarter $X industry. ongoing the is and feedstocks, turbulent billion

year-to-date X.XX. safety planned instilling In and This for rate than importance safety-related we year, by convey touch to approach company's X to at points and to spontaneous, throughout authentic to XX% LyondellBasell's performance. XXXX, is powerful This Slide related impactful naturally of of these that yielding contractors occur improvement opportunities our our more safety the commitment during emphasizing or results. our points provide performance. to touch it's workday leadership are safety interactions and has facilities. and Whether incident improved safety consistent employees turn personalized leadership remains recordable a the daily our to Let's component total review culture. unwavering

supporting employees toward XX,XXX of want This represents During employees. thank injury substantial across had in we goal that to progress track a our to updates we all zero I our their the goals than recent addressing global Scope greenhouse publication On to March, X edition our ending focus X waste our progress commitment graphic X, to the progress Goal our society. This our targets net highlight our and X only emissions targets on of goals. longer-term of our by these the Last thriving our plastic Scope from report X journey. accelerated that and ultimate goal toward September, annual set Zero and from injuries, interim global fifth for change, report recordable gas operations cover more of The and Slide our we of a report. XXXX year's climate achieve help workforce XXXX. highlights sustainability

diversity, Our XXXX and interim to a baseline. meaningful our the reduce this per announced share from we to tons of based emissions supporting recycled our targets operations initiatives. polymer In new XXXX absolute global circular is goal relative area year, production, our and is plastics, renewable to inclusion XXXX equity our X year target of And produce feedstocks. a million by XX% from

XX the leadership to where senior population our more parity some years. gender U.S. underrepresented collaborations achieve the across X, increase recent to of are reflect we general to goals sustainable and leadership Please within senior Slide global our to of number products. groups Our turn develop highlight our in

plastic Nippon post-consumer polypropylene. with Chinese and waste collaborated The reuse on feedstocks. for market we've reliance packaging mechanically recycled First, produce paint Paint fossil-based containers CirculenRecover to the using LyondellBasell's reduce

waste made molecular we fossil-based new with redesigned The LyondellBasell's from polyethylene polymers Next, and tubes we produced show and our advanced tubes caps plastic developed to the recycling shower an are fully that providing retain CirculenRevive for be using of brand's example L'Occitane are for recyclable Albea The while customer, look reducing tubes the designed an and with consumption of life a and process feedstocks. that iconic feel waste. plastic scrub.

to Neste McDonald's from renewable polymers collaborated such oil. used drink McDonald's our polypropylene bio-based produced for sources as develop cups several customers we Finally, cooking from by CirculenRenew clear using feedstocks with

a of with recycling the years. waste. landfills post-consumer over have plastic extend consumption are both collaboration to the of collaborations partners. facility And up have LyondellBasell's facilities sustainability plastic making waste chain. X our recycling establishing at electrical collaboration restaurants. cups similar that availability partners, Wendy's from Florida. Jersey feedstock agreements decarbonizing helped our will York, recycling in the and In Houston, their invested Houston we Germany underway good couple make with support purchase and supply loop and to rates plastic Wendy's that estimates down and the closed first on by renewable our progress New divert from material coal New with pounds in power in increase power million form also We eliminating CirculenRevive we Also, waste for XX we Wesseling, through recovery investment improve

addition, company. collaborating In peers want our we by on best the with acknowledge large-scale the exit for for carbon of that and was facilities decision provide to exit we an XXXX. difficult would determined industry. but capture the end storage Notably, region of decarbonize to are the decision, to likely This the is Houston development our help business outcome refining the a we several that

gas reduce of talk expected LyondellBasell's this the the X this sustainability call. shutdown X more in XX%. greenhouse will about on emissions by is nearly the later Nonetheless, decision We front, and Scope to refinery

Our circular proprietary to our partners X LyondellBasell's profitability. review decarbonization leverage on strategy technology to and Please quarterly to Slide with plastics capable advance and progress our both turn is collaborate initiatives. to

and $X During volatile product quarter. results. COVID the our by over war energy Europe similar in the billion Americas. most to prices Ukraine in across the for the and our portfolio Supply supported the pandemic headwinds EBITDA, during solid quarter feedstocks, and margins products for created markets first triggered delivered of demand business quarter, disruptions fourth Despite

in signs destruction in through have watchful While and energy the been largely we we for remain products. passing costs from of successful of higher feedstock our inflation, prices demand

expect oxyfuels fuels hinder travel Asia from during profitability as increased quarter. will in benefiting recovers. strict X global and and in-person activities growth resume and businesses refining our policies At the for China second We are the to continue transportation demand in COVID LyondellBasell,

expect depicts that We profitability. fuels X LyondellBasell's year. favorable through transportation will historical for Slide next continue markets

strong market first prior of of billion clearly $X.X the EBITDA for business EBITDA. we XX% the nearly cycles. and our larger we with above In asset LyondellBasell's of XX course complete the today's cycle is average business $X.X delivered from last delivered an cycle LyondellBasell's average. up of over company, performance prior months, base, earnings billion the Over stepping

detail. more a that, Michael, into propylene the call turn the to results financial with our oxide next diversified positioned will I'll over and portfolio asset this With and growth extend oxyfuels and underway describe segment well larger in are to base We performance with cycle. who

Michael McMurray

and to operating quarter, you, $X.X turn morning, the billion let extending the generation begin last cash of generated our operations from from record me cash Thank over billion $X.X LyondellBasell good XX activities of the everyone. theme X, Ken, the by cash Please stepping-up contributed businesses. and a in that toward new from to Slide first months. substantial In

capitalization market our company to highly of past XX cash flow generous in relative generation our for yield extending reinvestment the record business, XX% During the cash. converted After sustaining team our in into proven a focused months. The last X accounting the our is we provide shareholders. efficient of team over prudent reinvested XX% EBITDA our returns on our and operating of cash quarters, achieved to LyondellBasell capital efficiently track for free

repurchase and XX building during first the our billion some the generation capital investments Slide for we $X.X balance operating and the the dividends on and with sheet. funded continue details cash activities, Let's shares quarter. while allocation from quarter With of first our review to and cash continuing cash of

During our the approximately nearly first shareholders the quarter, to $XXX repurchase X.X million million we dividend and shares. returned of through

more targeted billion maintenance in ratios leverage year. short-term this and with than This billion $XXX of world-scale million We We continue X.Xx available capital and and liquidity. ended see of below for at $X.X our time. expenditures. starting later quarter new invest our in up and deleveraging with and range cash includes no to trailing projects X.X, our debt PO/TBA we $X.X this plant EBITDA, of investments the With to X.X are further our cash need total growth at

on our Now I'd Slide each provide for an like the of XX. results segments to of overview

mentioned, during quarter. LyondellBasell's portfolio EBITDA of billion delivered $X Ken over As the first business

and I&D solid by results and for reflect Our APS our margins market that products costs our in O&P-Americas improving demand our compressed benefiting segment. higher offset segments, conditions, feedstock

segment Let's XX begin Polyolefins with performance our on the segment. individual discussions Olefins Americas and of the Slide

La to and XXXX. maintenance quarter $XXX the feedstock propylene to America margins site for results due million our Olefin at $XXX in pricing was We to the compared than cracker that crackers fourth and completed a EBITDA quarter. lower lower with First XXXX higher quarter quarter first raw planned North Stable at Texas material decreased million approximately an prices logistics led lower million, our ongoing declining Polyolefins achieved by decreased fourth contributed resulted quarter reverse butadiene lower during approximately to contract lower coproducts. volumes and margins costs operating to increase Porte, $XXX driven monomer challenges. quarter due and results March, despite rate compressed comparable costs. $XXX of of during the the XX% in fourth higher volumes to relatively polyethylene million prices. trends In prices and product we demand

quarter. demand see to polymers our strong second continue as We head the we for into

and summer rise product energy tightens reflect as demand and costs stronger feedstock recovery margin expect We higher markets. prices

results to cost. Stable review Higher in at We prior disruptions and performance planned rate capacity product Asian of to cost Slide low caused Combined Now spreads please million, Asia markets, China about to rising XX% and million. income turn due monomer venture polyolefin volumes in $XXX International the volumes despite segment. increased of approximately prices EBITDA our maintenance European in our energy driven volumes, the resulting to $XX and first higher about to Europe, quarter in crackers quarter. million supply a increased $XX equity than Olefins and polyolefin feedstock operated XX war prices results increased by higher the million improved EAI polyolefin resulting our compared offset Polyolefins and $XX of valuation Ukraine. that margins by Prior million from higher quarter million. approximately cost. driven Olefins quarter. by increased feedstock and the COVID-related weaker and monomer Historically lockdowns demand LIFO spreads price offset drove joint were $XX charges by decline inventory energy impacted results of $XX as fourth of

we quarter, support as margins price should Australian an and quarter comparable integrated and segment During pace our increasing the the be will second to we XX, with agreement costs. Veeva polypropylene April for demand reached first to On expect sell that Energy. to the business increases volumes steady keep

to charge we We expect to Last this EAI million planned sale a at provided guidance $XX we second approximately impairment turnaround second quarter will in quarter about noncash Berre, maintenance work O&P in the impact of think asset related our segment quarter, of to additional the business. Due EBITDA this related now by cracker million. France. $XX

begins concerns markets polyethylene for is the inflation about through high review to the X to Slide resilience chart demand it trigger to last potential depicts In other strength polyethylene the recessions. demand years. XX instructive XX, recession, over the of past U.S. of As the the growth relative

staples and remarkably relatively GDP. inelastic for of than in the embedded PE at demand Polyethylene demand wide-ranging as by typical lives. is is vehicle daily a markets, increasingly and higher U.S. food care block products health a consistent hygiene line, a such foundational building indicated consumer shale with As rate supplies polyethylene applications from housing advantage fairly feedstocks, turquoise modern PE is products. market. and serves X%, for Unlike resilient with meaningfully global a And and compounds production U.S. cost about packaging, our essential

Robust Slide valuation these of prior people life. purchasing $XXX were million results approximately charges EBITDA businesses We million. Intermediates gain in impacted Prior of of a as quarter. expect look by and as XX LIFO first more million, turn our $XXX resulted Derivatives and in power $XX will inventory above expansion Please increased segment. margin the these record take essential trends most quarter quarter growth emerging resilient modern for consumption at in markets continue we products to

and gasoline comparable derivative tight primarily First increased quarter acetyls styrene Derivatives seasonal expect dial results expected increase million Margins as Durable we as the $XX with second Volumes segment. quarter. demand we in levels, remained increased volumes typical solid, propylene other Channelview, for ratio and fairly moderation of supply. oxide more and impact dial facility the and construction and our to butane Intermediates With a quarter maintenance our business XXXX. are Prior X more X by related prices strength to and million was feedstock for results associated quarter demand Oxyfuels our margins butane chemicals in in at by goods business a to most expected with businesses, $XX the located oxide Intermediate relative in volumes oil. margins million. typical Derivatives markets. products expanded. the related building of increased million. seasonal the with driven feedstock improved first gasoline our approximately to reliable pre-pandemic goods of units profitability is and a and and demand Margins increased oxyfuels at contributor to $XX products gasoline summer pandemic, In to approaching than expect increased market from Planned derivative for resulting site in and to on results return prices EBITDA reductions for improved travel. than higher durable result crude quarter, Intermediates the Texas as costs operations. in expand propylene butane oxyfuels in of $XXX butane increased oxyfuels demand segment performance our second for

several Porte, we restarting Texas in are are million. EBITDA $XX past acetyl Over our a quarter we site. products May, X the approximately estimating for second at weeks, currently force equipment of production impact successful the we declared If failure due acetyls for majeure to during downtime La

solutions of resulted stronger Margins higher of margins the $XX driven quarter Compounding increased roofing approximately increased pricing forward improving quarter. of million, million. energy Advanced on by parts through automotive due LIFO demand and Catalloy million Improving prices. Volumes $XX asset relative by move material XX. automotive EBITDA segment quarter. $XX seasonal manufacturers improved Solutions production let's Slide million. product to the results to million, from increased impacted fourth charges valuation Advanced product were and $XXX raw inventory fourth results increased costs. review offset higher from and demand in by and increased Prior the partially utilization, and than results first for our higher Polymer higher $XXX Now results quarter and volumes

production margins. We a similar these return and increase builds volumes rise quarter cost the forecast impact in drive until XXXX. continues automotive while XXXX automotive expect IHS levels X% second in be recovery XXXX. production a results peak predicts rising will global latest in a as The to X% delay reduced forecast to prior Unfortunately,

Now please our turn discuss Refining to Slide the segment. of XX and results

offset partially decrease higher lower increasing million. to Our for a the first first inventory April, of and due XX% Refining fuels. diesel In margins $XX.XX expand to XXX,XXX $XX average the million, $X a changes benchmark quarter expanded X-X-X quarter, benefited million. demand significantly EBITDA of for was by results Prior per Maya nameplate from approximately with demand continue quarter LIFO $X.XX per capacity of $XXX value. valuation to barrels In of increase barrel, day. byproduct operated gasoline with transportation refinery an We throughput at crude the

the remain months. segment. refining expect our Technology Please Slide will we as review turn to summer favorable results markets XX We the for during

$XX than lower the catalyst and First million margins. $XXX licensing were and revenue quarter volumes EBITDA higher by record prior quarter's was The level. results lower driven million,

will the on quarter the I'll for timing business profitability the revenue Ken. that higher milestones. second anticipated call technology based licensing slightly to Ken? of With first expect that, quarter our be turn over We than

Kenneth Lane

Michael. you, Thank

exit crude than our no earlier, of the we last business end As I refining announced later mentioned the oil decision to week, XXXX.

options, require thoroughly operation significant never forward. the that next year our these exiting investment. refinery path business best determined are beyond the we easy, While analyzing of the capital was After would decisions

intention refinery next to Our the of to strong through is for at fuels. operate transportation range full market meet end safely the year demand

time, potential and for that During continue the to consider we alternatives transactions will site.

progress LyondellBasell the company's reducing by exiting make refining, earlier, will greenhouse emissions. in mentioned gas substantial As

future in location community. of XXX recognize In hubs. valuable acres of and center one site's affects families including The our located We further the with circular leading unique provides petrochemical businesses. on growth, their addition, the LyondellBasell world's refinery that development the decision integrated is the for this options our of employees,

the contractors and through at thank our employees cost delivered and improvement committed in over this are we profitability have people refinery the sincerely safety, them Our reliability, past supporting several and contributions, We transition. to performance for years. outstanding their

economy, benefits resilient. quarter Now the highly and results turbulence let outlook With our products LyondellBasell's quarter of for me global summarize global first with XX. all our the business our the how Slide in demand is and portfolio of first the illustrate

segment business. is margins, and suffering strong low weak in and from and in consistent. Asia quarter remarkably margin margins demand in Americas compression While and Intermediates Derivatives our the historically our markets Europe first Improving remains O&P-Americas offset

chain demand PE weakness our expect to in We increased fuels demand polymer Also, recovery improve increases. driving with for transportation pandemic-related a price supporting oxyfuels margins businesses. seasonal is higher Refining from and

result, a expect generation will we at remain LyondellBasell. As strong cash

our our up about are earnings, of renewable applications. we meaningful few products for circular on a stepping like in customers and to develop Just we sustainability. with Today, progress collaborations our talked

share to are capital we path exiting cash generation, and we a entering and prudent expanding for will latest significant shareholders are that our the toward report. renewable and With our And into remain rewarding committed targets in through growing agreements of We raising plan our power robust disclosures decarbonization. dividend drive progress supply on refining allocation. sustainability our on continue repurchases. to We

highly in our to of We investment-grade balance are The and an growth are in times remain inorganic LyondellBasell. disciplined consistent months for organic commitment coming investments. and sheet exciting consideration our

Our despite economic conditions. are generating businesses results resilient volatile

year, we business robust market strong groundwork our margins propylene oxyfuel the and reshape And our during assets chains later up be new, are more We period will a starting oxide to for that sustainable models across new value are demand. industry. and this likely laying of

leadership. take about pleased lead the to your of questions. I company our CEO, Peter Vanacker, XX, to his LyondellBasell. now welcoming look forward to I under share hope May future my on our We're Finally, enthusiasm next you

Operator

Instructions]. [Operator

comes from Parkinson Mizuho. line Our the Christopher of with question first

Unidentified Analyst

a on and in bit for touch could price the you're was the in O&P-Americas the quarter throughout maybe have Kieran little rates that supporting been and terms of throughout you what second year? throughout you announced just Chris. of is wondering what year increases how expecting rest in I more operating if and see This the XQ

Kenneth Lane

your for you question. Thank

as remarks, we've we during are still said demand the bullish -- are very in Americas. outlook, the We especially on the

we see So had We sales the month very for in polyethylene April being we of looking to Americas. demand see a actually And strong. month record in the March improve on that.

So is we're that XX% continue to the rates in higher -- we'll outlook probably or rates, our range. effective see operating

going to So supportive very in the the increases market price that's for be that are today.

Operator

comes of Jeff Zekauskas next with JPMorgan. Our from question the line

Jeffrey Zekauskas

you something prices XX do And XX, have to Bora if like of that, in to prices, can forward down maybe maybe look at your the a other Maybe $XXX profitability make that. been China the in was a regions? Polyethylene month at that that movement they're I would continue fall. on What of ton comment thought in changing pretty higher you upward cracker. poor also and even the profitability there's prices, you

Kenneth Lane

hope your Jeff, doing well. question. you for Yes. thank you're I

A been that still to we've definitely, COVID of China, So headwinds seeing there. lockdowns. the related lot

on some China can of impact seen. demand we've you with an going profile challenging chain supply to is we lockdowns have that the quite that today imagine, Also, see. the of the situation in that's As amount

of you operators And crackers, the they rates. when cutting industry of do the crackers, there, all all China. are So pretty been with back prices in across today the on look have see feedstock basically you moving much

a So reduced we've asset. us even first the joint got at for Bora quartile we've rates, and venture,

going in means, So and come That inventory. reset is any a going we you're in see to are in expect you're do happen demand not I by come Inventories expect high reopening inventory going back. the see you're China. see is impact then that to come coming still around going And what's to to the to China months, down.

short profitability cracker And seeing China. so some in the we're assets in while challenges with yes, the term, around

expect few months, and out I to look snapback reverse to in next As going that's I in see the demand. you're a going

Operator

line question Bank with next America. from the Byrne Our comes Steve of of

Stephen Byrne

that because lots into about for that a is naphtha ethylene? your get products is carbohydrate that have -- pursue you Circulen such from of questions kind renewable from renewable a and as term couple go which I not can get credits see feedstocks Renew, challenged diesel that the the feedstock of and of and you Neste. longer why about ethanol-sourced Do path as perhaps derived

Kenneth Lane

Steve, Thank question. for your you, Yes.

So proud of portfolio we're very product developing. the we're that

As said of globally in beginning to you're the a circularity and we've brand looking of the we're fruits being see before, last to forward that Circulen we've the us. with as of In in we CirculenRenew the the leader area look segment effort that smaller will products be part for year, our launch together been developing customers today. of our portfolio forward, portfolio, our probably

parts technical customers. fit capabilities ability of with together our our are advanced recycling really very do application Those our our to new we processes, developing recycling but mechanical around with business. more on and that the development the bullish much We develop also well

opportunities we why footprint COX doing and demanding CirculenRenew to So develop which recycling, will you are products. when content. see that But products, we customers lower continue primarily is portfolio, for where people those look the remember, where driving want recycled you're are to CirculenRenew

So there for marketplace. a is value a those little in the bit of different products X proposition

Operator

Our line BMO the of Capital John Markets. McNulty next question comes with from

Bhavesh Lodaya

for John. Lodaya Bhavesh is This

So especially I&D very quarter. the segment, in first clearly, in the impressive results,

within in first the in Now quarter, with the spike crude. lot March changed a

earnings the break a What of earnings you quarter? then normalized expect level year. And would the March in earnings could to this you be? out rest that versus maybe you more oxyfuels describe norm the So seen mentioned of that new or return to

Kenneth Lane

Look, the relative Yes. slate the first for recovered, very in on across a quarter, especially quarter record Intermediates We for the got demand margins the the strong there. the as pretty much Bhavesh, fourth had that feed bit butane progressed, quarter question. and did a see, relief segment. feedstock quarter, We Derivatives Thanks, portfolio. & really to little strong even of

second the good, margins continue to to quarter. product constructive going we those of to going things be that look for continuing are all So average. as very above Demand of be have are all very into and go lines the are we to

as to So foreseeable to that in in seeing those strong supply-side well. but very going they're do we have I said even more impact expect of demand. normal comments, And that the would for be just because future we're we're those mid-cycle businesses we the level, supportive believe pretty businesses, Michael get to prepared some a above going back as

having issues competitors in these with our of are also markets Some production.

strong lead for very all think, So second of quarter in a that I going I&D is the performance to, to

Michael McMurray

what I'd if add delivered decade of consistently look also of EBITDA. oxyfuels Ken, around kind of pandemic, the at plus oxyfuels, And million business the specifically the before $XXX kind you

of So a very earnings. consistent generator

Kenneth Lane

Great. Thanks, Michael.

Operator

Our comes the Andrews Morgan with Stanley. of next Vincent line from question

Vincent Andrews

curious versus the just quarter of looks Is the $XXX decision thought behind cash It to build there any cash. buybacks. I'm particular million of $XXX like build about in that? million stock

Kenneth Lane

to So can cash committed returning is disciplined a priority. listen, capital And, on thanks just your shareholders to Michael, for course, maybe around to of absolutely going continuing that. We're comment be you excess bit allocation. our Vincent. a question, be to very our little

Michael McMurray

of need balance a couple and reputation No mean, I shape. a mean established great the in say mean, delever, think cash we've things. I converting into listen, a flow. further track free EBITDA I one, Yes. of I is record and to sheet I'd

built quarter almost year-on-year cash cash a to dividend. flat. is message capital this going we're be growth meaningful And then year going bit [indiscernible]. are the to no million. investments of should year CapEx return last in paying to versus on flattish the There's that We'll Our our shareholders. $XXX a dividends. we Working of grow first little consumed amount be

Operator

of line comes question from Alembic Hassan Our Ahmed Global. the with next

Hassan Ahmed

my I it LNG if we're a the I seen. LNG But sort serve up, be approved. we've there ethane and question I pricing current be year XX right, rising, Production it of natural seem right? seems seeing export a right? bunch popping that also export are this around opportunities numbers beyond. moves that supply terminal mean we a gas and of approximately lot cross Ken, mean and levels mean, obviously have me currents, just to of

near term ethane of extreme as the as about things? the side think natural well we should how longer-term gas So and

Kenneth Lane

the natural short-term impacts about gas. of been question. are ethane It's especially much is of to lot very natural driving gas around are following going be -- higher. a that. there's course, Listen, a -- lot Thanks happening, that there talk what's for of And

high. at you complex, alternative the If very is just energy coal with the look

So you is don't natural see the switching, although gas up. production for coming

So normally, in drop-off natural we bigger see this of time gas year, pricing. a would

I of just things. that's because of bit little a think a couple delayed

part weather in northern of United colder got the States. You've the

-- demand to be high the So coal continuing prices. is higher

exports. get will inventories LNG we course, summer, maxed the U.S., Europe in I the Until mid- and think sometime think on which refilled late to out kind Of be in are still I gas, elevated of back come volatility of normal more you're to the lot in to end natural do a a into for see prices level sometime it and going back of expect I but summer. the in

export a develop longer time facilities and long these term, to Now take build.

rates even it see, think production currently we're to while those and that constructed, going accelerate. is being going are So to things seeing are you're what I the

So of of you're oil since natural oil think, both those, on, more the see up for and production production on. coming ago. going Both to a of gas gas are year production about I more XX% coming

by be that is marketplace. generating of the to more supported in going NGLs All

So the believe ethane be States we to is very durable. the position or to United that continue advantage term, American around still longer going

Operator

the comes next of Citi. Juvekar from with P.J. line question Our

Prashant Juvekar

logistical that? months? Yes. sort Ken, because believe China few any there's you How polyethylene agree integrated with can't U.S. as into export assessment? that in margins issues. somewhat and you does over much the some And last improving are people that export seen play have of the we Do depressed given COVID that

Kenneth Lane

the no not the move around your some about been of and volume for fourth talked quarter. have we've able new. chain the course, there constraints Look, question. the headwinds thanks movements anything being since supply U.S. doubt even and to rail offshore P.J., in That's in

may That at I So volume I think on fourth is have this the commented already earnings quarter call. sold.

we it's sell -- on not twice. like really it's that can weighing So not

are demand supportive. We The the continues to on really focused trends. be demand watching very

very able being being month a minimize the of any I that minutes and shipments had few been March, We manage sales. we see products month ago to record in that have our to sales to mentioned we continue just of robust. in offshore impact our successful a And really to

in pricing quarter quarter. to So margin and second what I go see increase chain higher turn we'll U.S. the in going into up demand, expect back we as with to is first QX. that some in started the in the to That's recovery polyethylene continue expect I and some see change

David Kinney

in in nearly up exports. month And see of an production that this XX% March, March. of Dave. did just the in in is P.J., It's to increase chime we would I

the think we we back. continue trend numbers so get And April into that will once

Operator

line question Sison next from with of Our Fargo. Wells Mike comes the

Michael Sison

stream There's in a the start Nice is on supposed of to to come new China for polyethylene. year. lot capacity

profitability you've you sort you Any those will mentioned on come terms over maybe and stream, thoughts do projects in what getting there, be there? the pricing of delayed, that some think of Given of canceled? in

Kenneth Lane

when, before. focused that is big online growth these let's you returns, decisions, capacity do a China is I new it's those also developing still the Yes, of But that's China, to are development matter the for and we've of that, very not of slow of talked It's start-ups, we're And work about slow new things returns and capacity. forget, demand slow that importer absorb the at not as when is there. to a really going is And going China us, down especially what on it going policy development. it's polyethylene. of in just of watching in look if. that believe coming demand down some to energy to all the this to some whole the going

trends of we're really watching today. and And equation demand on those so the focused the side

Operator

Spector from UBS. the comes question line next of Our Josh with

Joshua Spector

bit our could Wondering view polypropylene your a demand. view supply talk And remain if mean chain on I spreads you little elevated. pretty that in about the is

how shutdown future, needs balance propylene et think the that that? with Or the you So do do internal of to after the over sustainability you options about have coming with quarter cetera. that? to managed? your about you that be the in how think refinery years, deal And curious Is that something

Kenneth Lane

The market. good, in you, and we're even strong bullish absence Josh. very polypropylene, actually the the a Thank supply-demand automotive there very are that's Listen, fundamentals of on.

Inventories see spread market tight. up a I already continues coming increasing to to into And the announced spreads The in to room second have We've go polypropylene. do be expect May. is down. very We coming think been increase quarter. for that there

about position So very we're good with polypropylene. feeling our

Operator

Our the KeyBanc next Yefremov question Markets. from Capital line of with Aleksey comes

Aleksey Yefremov

contracts with this on is in versus PO about to pass-through sort U.S.? of What Could year talk the those of margins? business And next the margins long-term project your spot your semi-fixed you you business? PO was do percent how given trend of expect start-up

Kenneth Lane

the have for for up about this timing, one we in to the for to asset production now -- extremely we to especially us and Thanks sales recent business Aleksey. the that Demand perfect Listen, the plant of propylene be in first issues business, side year. the we online a us, excited be in expect the very of been next Margins around continues ramping in up it's starting it's have case. see frankly, year. half going some strong in. industry, our position to core later And that oxide where be I is announcements supply with and Americas. the and We're that's question, getting and continue a improving that PO/TBA good,

timed we So really overall, have it any could better. I don't think

Operator

McCarthy the Vertical line from with Partners. Kevin comes question next Our of Research

Kevin McCarthy

alternative exploring of terms talk are about drive Yes. those what and Can might decisions? refinery that for the what the you're those uses in you

Kenneth Lane

your for ship a Channelview. great said, positioned thanks and good with we connections refinery Listen, site question. cracker in the it's very got like is the channel, pipeline geographically on Kevin, located our in

could that think those of would the feedstocks kit things terms like of some and lot lot a that do you of in we be we pyrolysis valuable if circularity and using, oil there some that there's about need a So can be of look that. hydrotreating at

straightforward, they're could but ambition. with very be fairly circular So synergistic our

several mid- So find value we long we're could we support go. for take to And the the really where years some term to our site that next good to can study strategy. in going that we think think to

Operator

Deutsche next with Begleiter question Our David from comes Bank. line of the

David Begleiter

the any, you're that is product? How on Hyperzone? about talk the getting what you plan and selling? Hyperzone progressing can of And premiums, the Ken, if type

Kenneth Lane

David, thanks for the question.

we through So before in had and the we able quarter that the been to that be continuing had that a work repairs some to make in we've asset, to first shutdown taken fourth mentioned quarter. to

that say, I side to going but to over from something are months. a have that's to the on demonstrated to we a get volumes product successful That's characteristics, selling asset. XX products but would we've XX So we premium there premium been to some ability in make equation differential be, ratably until now. very and still not position yet the products differential next is those, the small the it's the frankly able have of of that been build that

to view we that that's XX of to the company. stepping next at. that as up, we're looking upside we of talk the in So When XX part that about upside see we're some the months continuing for the

Operator

Steve Our of next ISI. with the Richardson from Evercore line comes question

Unidentified Analyst

on Sean is This for Steve.

check-in. quick a Just

facility And might what be quarter, in also choose repurchases strong this repurchases estimated you in refinery, the repurposing a cost might for the $XXX In cadence of then moving if go to of the generation? what in million direction? flow with cash the terms of an some for forward light sort be different of

Kenneth Lane

Thank take the second. you, question, Sean. I'll I'll first Michael let take and the

of way to to is safely and too us operate it's going the around site. about that listen, we're talking asset reliably. So for focus kind early for repurposing any refinery that costs The be now

there is to future. separate priority today and to for of assets focused that's really and we're the achieving to taking Of operating advantage result the we But marketplace going of to going some our really in at safely. options right on be the a great now team looking stay keep see be course, the going a what

Michael, So take next do question? you to the want

Michael McMurray

Yes, Ken. Thanks, sure.

expect of free amounts repurchase can guidance to that cash intention investors. you give won't a balances Therefore, we to probably what the that generate the execute going the is the I any to is copious While share sheet. our expectation of of we're level we activity to flow. intend year, on say expect balance I cash to our on return free meaningful can lot not that of to build cash flow It's

Operator

Capital Markets. with the Our from of next line question Arun comes Viswanathan RBC

Arun Viswanathan

a questions guess polyethylene. lot been have asked I around of yes, So

So maybe APS. I'll ask on I&D one a on question and

EBITDA in the peak the the I think X past. And that So has headed around so. mid-cycle been past, Looks think earnings you mentioned to maybe for as level I or you're X.X. a like in I&D, X

with APS area? $XXX that you're then the EBITDA that the recovery going level? automotive is in million it oxyfuels? what's And serious in thinking more to what a similarly get So still Is to recovery with take maybe to

Kenneth Lane

Thank Arun. you,

yes, mid-cycle before, we are above be I&A, I for that So business. mentioned to expecting for

that thinking would I expect say to would So I be would above the you're at. numbers where about we're be

strong had tailwinds. we've record sure, And had got I first mentioned For we quarter. very a

the second demand into or quarter second improving, So half optimistic the the going second of with into the second the into year very heading the year. coming we're half even even quarter of

be things what's for business. need is continue impactful biggest been margins. see the volume of able to to we've one there, The really going to APS, that maintain for equation on we Now margins improve and successfully that to

back able side up, refill going that and and to get to we're comes automotive the as demand pipeline going be to what's drive that's our So really results.

Operator

Pickering, Our Holt from the Co. line next & Blair Tudor, with question Matthew comes of

Matthew Blair

$XX we 'XX, Are about cautious I margin Or in pretty you're able going think capture? phenomenal margins closing but to at to right or to Coast capture now, phenomenal be know diesel potential cracks. -- numbers? your $XX pretty just you're reason QX? there is a should overall these looking on you be of at cracks, margin capture Gulf the are end refining refinery How the selling

Kenneth Lane

is inventories for today very Listen, margins. for question. gasoline over refining, strong we're cracks diesel seeing cracks, since Maya X-X-X very the yes, Matthew, $XX, strongest strong are The low. Thanks, XXXX,

very very assets utilization we're So well, the rates. high operating

to very expect just we margin question yes, your that shortly, answer be to to So able uplift. capture

Operator

that am you. back closing no further Thank comments. showing are turn it for Mr. I Lane will to I there questions.

Kenneth Lane

and again, questions thanks, our and Alex, you, interest your for company. Thank everyone, in

our close to excitement I at call, the the we around here LyondellBasell that's emphasize want future. Before building

year. Vanacker, starting and our PO/TBA update results, later our to, new resilient have generating Peter look are welcoming and our on be I We hope world-class is quarter and wish safe. asset we We we're second we're Please join you July going us and There results, in to up as about weekend. lot a stay May, all we great CEO, ahead. this lies you you'll excited what to forward in a

Operator

wonderful disconnect today's day. This time. for you concludes conference, at a your and participation, Thank this you may and your have lines

LyondellBasell Industries (LYB) 29 Apr 222022 Q1 Earnings call transcript