LyondellBasell Industries showed a small sales drop in the first quarter of 2024 even as the firm's profit was flat vs. the same quarter in 2023.
Houston-based LBI saw first-quarter sales fall 3 percent to just over $9.9 billion, as profit essentially was flat at $473 million.
In an April 26 news release, CEO Peter Vanacker said LBI "remains focused on unlocking significant value through our strategy while managing challenging market conditions."
"Our team continues to grow our [circular and low carbon solutions] business … building capabilities across the value chain, from upstream plastic waste sourcing to providing recycled and renewable-based polymers that meet increasing demand from our customers," he added.
Sales at the firm's Olefins & Polyolefins-Americas unit grew 2 percent for the quarter to $2.87 billion, with operating profit down 4 percent to $356 million. The firm is a major supplier of polyethylene and polypropylene resins.
LBI's Advanced Polymer Solutions unit — which includes North America's largest compounding business — had a rough first quarter, with sales down 3 percent to $965 million and an operating loss of $247 million. The unit had posted operating income of $13 million in the same quarter in 2023.
Officials said lower costs for natural gas-based feedstocks and energy in North America benefited olefins and polyolefins margins while regional demand for PE improved. They added that LBI's North American volumes were constrained by downtime in olefins, polyolefins and other materials.
In Europe, officials said logistics disruptions in the Red Sea restricted competitive imports and led to increased volumes from LBI's local assets for PE, PP and other materials. They added that soft global demand for durable goods continued to challenge volumes and margins for PP and propylene oxide.
Looking ahead, officials said that, in the second quarter, LBI "expects seasonal demand improvements across most businesses."
Low costs for natural gas and natural gas liquids should continue to benefit margins from LBI's North American and Middle East production, relative to higher oil-based costs in most other regions, they added.
"One year after launching our new strategy, the [LBI] team continues to be highly focused on execution, accountability and delivering results," Vanacker said. He added that sales volumes for recycled and renewable-based polymers "are rapidly growing through our comprehensive approach to building a leading CLCS business."
In November 2023, LBI finalized its investment decision to build the firm's first industrial-scale chemical recycling plant in Wesseling, Germany. The project was announced in late 2022, when LBI and Germany-based 23 Oaks Investments established the Source One Plastics joint venture. The plant will have annual capacity of more than 110 million pounds and is designed to recycle the amount of plastic packaging waste generated by over 1.2 million Germans per year.
Earlier in 2024, LBI acquired a 35 percent stake in Saudi Arabia-based National Petrochemical Industrial Co. (NATPET) from Alujain Corp. for $500 million. LBI officials said the deal positions their firm to grow and upgrade its PP resin business through access to advantaged feedstocks, plus additional product marketing capacity in a strategic region.
On Wall Street, LBI's share price began 2024 around $95 but was at $101.50 in early trading April 26 for an increase of almost 7 percent since Jan. 1.