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LYB’s Intermediates and Derivatives Revenue Also Fell in 2Q16

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Aug. 9 2016, Updated 3:05 p.m. ET

Intermediates and Derivatives segment’s 2Q16 revenue

In 2Q16, LyondellBasell’s (LYB) Intermediates and Derivatives segment reported revenue of $1.8 billion. Intermediates and Derivatives is the company’s third-largest revenue generator. However, the segment’s revenue fell by 18% on a year-over-year basis. The following factors influenced the revenue fall:

  • Average sales prices fell due to falls in feedstock, and energy-related costs impacted revenue by -21%.
  • A rise in sales volumes increased the segment’s revenue by 2%.
  • Favorable foreign exchange impacted revenue positively by 2%.
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Segment EBITDA falls

During 2Q16, the Intermediates and Derivatives segment posted EBITDA (earnings before interest, tax, depreciation, and amortization) of $397 million compared to $466 million in 2Q15. This implies a fall of 14.8% in EBITDA on a year-over-year basis. The fall in EBITDA was influenced by the following factors:

  • A higher fall in crude- and gasoline-related product prices than in feedstock prices resulted in an EBITDA fall of 30%.
  • Equity investments caused EBITDA to fall by 1%.
  • Increased sales volumes impacted EBITDA positively by 6%.
  • Further, LCM (lower of cost or market) inventory valuations in adjustments boosted EBITDA by 10%.

Investors can gain indirect exposure to LyondellBasell by investing in the Guggenheim S&P 500 Equal Weight ETF (RSP), which held 0.20% of its portfolio in LyondellBasell as of August 2, 2016. The top holdings of the ETF include Mosaic (MOS), Albemarle (ALB), and Sherwin-Williams (SHW) with equal weights of 0.2% each.

In the next article, we’ll look at LYB’s Refining segment.

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