LyondellBasell (Rotterdam / The Netherlands; www.lyondellbasell.com) has reported a record operating profit (EBITDA) of USD 1.79 bn in the third quarter of 2011, a 45% year-on-year increase. Sales in the period were USD 13.3 bn, compared with USD 10.3 bn in the third quarter of 2010. The results were also an improvement over a very strong second quarter in the year – see Plasteurope.com of 05.08.2011. The US olefins business made a notable contribution, benefiting from both strong ethane- and naphtha-based ethylene margins. The company closed the quarter with no net debt and is now restructuring its balance sheet, its CEO Jim Gallogly said.

EBITDA in the olefins and polyolefins Europe, Asia and international segment fell by USD 33m compared with the third quarter of 2010 to USD 261m, on sales of USD 3.94 bn. Underlying performance in olefins was relatively unchanged, while PE operating profit fell by around USD 20m year-on-year, primarily as a result of lower margins. PP EBITDA fell by around USD 90m compared to the same period in 2010 due to lower sales volumes and compressed margins. PP compounding results improved slightly compared to Q3 2010. Gallogly said the company had achieved good results in the segment due to its differentiated positions in polypropylene compounding, butadiene and its joint ventures.

The olefins and polyolefins Americas segment saw an increase of USD 155m in operating profit over the third quarter of 2010 to USD 673m on sales of USD 3.57 bn. Olefins results increased by about USD 300m year-on-year thanks to improved margins. This increase was partially offset by PE results, which declined by around USD 120m compared to the third quarter 2010 as a result of lower margins caused by higher ethylene prices. PP results declined by approximately USD 30m compared to the third quarter of 2010 due to lower sales volumes and margins.

In the intermediaries and derivatives segment, which includes propylene oxide and its co-products, EBITDA increased by USD 54m compared to the third quarter of 2010 to USD 297m on sales of USD 1.69 bn. EBITDA in PO and PO derivatives improved year-on-year thanks to increased PO derivative margins. Increased acetyls, ethylene oxide and ethylene glycol volumes and margins also contributed to improved results compared to the third quarter 2010.

Commenting on the outlook, Gallogly said: “We are currently operating in a period of global economic uncertainty, which has introduced significant raw material price and profit margin volatility. The volatility limits our near-term visibility, but our strategy of focusing on the basics and running our assets safely and efficiently has proven successful in any environment. During the coming months, in addition to olefins chain margin volatility, we expect to see typical seasonal impacts in the refining and oxyfuels and polyolefins areas.”

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LyondellBasell Third Quarter 2011 Earnings presentation as a PDF document