LYB Releases Q2 2026 Earnings Report

Net profit: approximately $600 million; $1.4 billion excluding certain items.

- Diluted earnings per share: $1.71; excluding specific items, $4.30 per share.

■ EBITDA: $1.3 billion; $2.1 billion excluding certain items

Continuously optimize the business portfolio by selling part of the European assets, structurally improving cost competitiveness, and aligning the European business layout with the company's strategy.

■ Continue to achieve fixed cost reductions and capital expenditure optimization through the cash improvement plan

Seize the opportunities brought by an improved market environment through robust business execution.

Amid a rapidly changing macroeconomic environment, we delivered outstanding operating performance through prudent business decisions, the support of a strong asset portfolio, and margin improvement driven by a better market environment. In response to global supply chain disruptions, we quickly increased operating rates to better serve our customers, fully demonstrating the flexibility and resilience of the company’s global asset footprint and supply chain network. At the same time, we decisively advanced the sale of certain European assets and continued to implement our Cash Improvement Plan. These actions are helping LYB build a lower-cost structure, thereby enhancing profitability and cash generation. Looking ahead, we will continue to prioritize safety, reliable operations, cost discipline, and capital allocation to create sustainable value for shareholders.

Q2 2026 Performance

In the second quarter of 2026, the company reported net income of $559 million, or diluted earnings per share of $1.71. During the period, the company recognized certain items totaling a net after-tax amount of $842 million, which had an impact of $2.59 per share for the quarter. These items primarily included a loss from the sale of certain European assets, as well as an asset impairment related to a joint venture in the Americas Olefins & Polyolefins (O&P) segment. EBITDA for the second quarter of 2026 was $1.3 billion; excluding the special items, it was $2.1 billion.

In the second quarter, the ongoing geopolitical turmoil led to rapid changes in the market environment across the company's various business segments, resulting in tighter supply. In the Americas O&P segment, the global supply tightening drove an expansion in polymer profit margins and an improvement in related product prices, significantly boosting performance compared to the previous quarter. The company fully seized market opportunities, achieving an average utilization rate of approximately 90% for its advantaged assets in North America. The O&P segments in Europe, Asia, and international markets also benefited from the improvement in polymer price spreads caused by supply chain disruptions, along with increased contributions from joint ventures.

The profitability of the Intermediates & Derivatives (I&D) segment has further improved, mainly due to the enhanced profit margins of oxygenated fuels, methanol, and epoxy propane derivatives. The unplanned downtime of the Bepot PO/TBA facility in this quarter had a certain impact on performance. The facility was successfully restarted in June and resumed full-load operation by the end of the quarter, laying the foundation for sales growth in the second half of the year.

In the second quarter, the company generated $752 million in cash flow from operating activities. Due to rising product prices and higher operating rates to capture market opportunities arising from global supply disruptions, changes in working capital resulted in a cash outflow for the quarter. With the successful completion of the sale of its European assets, the company received $310 million in cash proceeds as planned. In terms of capital allocation, the company maintained a balanced approach, with capital expenditures of $270 million, while returning $224 million to shareholders through dividends. As of the end of the quarter, the company held $2.6 billion in cash and cash equivalents, with available liquidity of $7.1 billion.

Strategic Highlights

Recent developments indicate that the situation in the Middle East remains fluid and is expected to continue affecting the energy and petrochemical industry value chains and causing market volatility. The timing, pace, and scale of supply recovery affected by the conflict remain highly uncertain, and the recovery period is likely to extend into 2027. Although the company does not expect demand in its core end markets to decline significantly, uncertainty over near-term price trends may temporarily affect regular purchasing patterns.

The restart of the Beipote PO/TBA unit is expected to drive sales growth in the I&D segment. Meanwhile, scheduled maintenance at the Clinton production facility will have some impact on polyolefin sales in the second half of the year. To align with global market demand and the company's maintenance plans, LYB expects the operating rate of its North American O&P assets to be approximately 85%, European O&P assets around 70%, and I&D assets about 85% in the third quarter.

While continuing to advance its cash improvement plan, LYB will remain flexible in its commercial and operational approach to respond proactively to a changing market environment. The company’s capital allocation priorities remain unchanged: safely and reliably operating and maintaining its assets; further strengthening its balance sheet through orderly deleveraging, including the repayment of debt maturing in September; maintaining an attractive dividend policy; and selectively investing in opportunities that enhance long-term shareholder value.