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January 31, 2020 11:29 AM

LyondellBasell expects a better 2020 after a difficult 2019

Frank Esposito
Senior Staff Reporter
Plastics News Staff
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    LyondellBasell Industries
    Bob Patel

    After a challenging 2019, materials giant LyondellBasell Industries is looking forward to 2020.

    LBI, which is based in Houston and London, saw 2019 sales drop 11 percent to $34.7 billion as annual profit slid almost 28 percent to just under $3.4 billion. The firm is one of the world's largest makers of polyethylene and polypropylene resins and North America's largest plastics compounder.

    "During 2019, LyondellBasell continued to exhibit strong cash generation and remained committed to our disciplined capital allocation strategy," CEO Bob Patel said in a Jan. 31 news release. "Our businesses benefited from abundant and low-cost natural gas liquid feedstocks throughout the year, and we demonstrated our capability to derive value from M&A through the integration of the A. Schulman acquisition."

    Sales for 2019 in LBI's Olefins & Polyolefins-Americas unit, which includes PE and PP resins, fell 10 percent to $8.4 billion as that unit's operating profit tumbled 21 percent to just under $1.8 billion.

    Full-year sales in LBI's Advanced Polymer Solutions unit — which includes the former Schulman business — grew more than 20 percent to $4.85 billion, but operating profit for the unit was down almost 12 percent to $290 million. LBI acquired Schulman, a major global compounder and concentrates maker, for $2.25 billion in early 2018.

    Olefins & Polyolefins-Americas was the second largest of LBI's six operating units in 2019, with just over 21 percent of sales before eliminations. Advanced Polymer Solutions ranked fifth with just over 12 percent.

    "Our foundations of operational excellence, cost management and disciplined capital allocation continue to serve us well in the current challenging environment," Patel said. "We anticipate typical seasonal improvements for our businesses as we progress through the second and third quarters of 2020. Favorable resolution of trade policies and a rebound in industrial demand could provide significant upside for our industry."

    On Wall Street, LBI's per-share stock price was above $97 as recently as early November, but had declined to under $79 in early trading Jan. 31.

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