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Why Did LyondellBasell’s Technology Segment’s Revenue Rise in Q2?

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Technology segment’s 2Q16 revenue

In 2Q16, LyondellBasell’s (LYB) Technology segment reported revenue of $129 million. The Technology segment is LYB’s lowest contributor in terms of revenue. The segment’s revenue rose by 20.6% year-over-year in 2Q16. The following factors influenced the rise:

  • Recognition of revenue from previously issued process licenses increased revenue by 8%.
  • A rise in average catalyst sales price brought additional revenue of 1%.
  • A rise in catalyst sales volumes boosted revenue by 10%.
  • Foreign currency translation boosted revenue by another 2%.
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Technology segment EBITDA rises

During 2Q16, the Technology segment posted EBITDA (earnings before interest, tax, depreciation, and amortization) of $73 million compared to $57 million in 2Q15. This implied a rise of 28% in EBITDA year-over-year. The following factors influenced this EBITDA growth:

  • Higher catalyst sales volumes bumped EBITDA up by 16%.
  • Higher catalyst margins and licensing and service revenues caused a 12% rise in EBITDA.

Investors can get indirect exposure to LyondellBasell by investing in the Materials Select Sector SPDR ETF (XLB), which held 0.13% of its portfolio in LyondellBasell as of August 2, 2016. The ETF’s top holdings include DuPont (DD), Monsanto (MON), and Ecolab (ECL) with weights of 10.8%, 8.3%, and 5.8%, respectively.

In the next article, we’ll look into LyondellBasell’s valuations along with those of its peers.

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