LyondellBasell reports 2024 earnings: Strong cash flow amid market challenges

LyondellBasell Industries, a chemical industry leader, has reported its fourth-quarter and full-year 2024 financial results, highlighting strong cash flow despite a challenging economic environment. The company faced headwinds from weak global demand, rising raw material costs, and pressures in the refining sector. However, it remained committed to its sustainable product growth strategy and disciplined capital management.

CEO Peter Vanacker emphasized the company’s resilience, noting that despite the downturn, LyondellBasell successfully executed its long-term strategic goals. He highlighted the company’s ability to maintain strong cash generation while expanding its circular and low-carbon solutions business, which saw significant volume growth in 2024.

What Do LyondellBasell’s Q4 2024 Earnings Reveal?

LyondellBasell reported a net loss of $603 million for the fourth quarter of 2024, equivalent to $1.87 per share. The loss was primarily attributed to non-cash asset write-downs in its European and Asian operations. These impairments included $769 million in the Olefins & Polyolefins (O&P) Europe, Asia, and International segment, as well as $42 million in Advanced Polymer Solutions (APS), reflecting continued market challenges in these regions.

Excluding identified items, net income for the quarter stood at $249 million, or $0.75 per share, demonstrating the resilience of LyondellBasell’s core business operations. The company reported an EBITDA of negative $409 million for the quarter, or $689 million when excluding identified items. Weak refining margins, higher energy costs, and seasonally slower demand contributed to the overall decline in earnings.

How Did LyondellBasell Maintain Strong Cash Flow in 2024?

Despite earnings pressures, LyondellBasell generated $3.8 billion in cash from operating activities in 2024. This strong cash flow reflects the company’s financial discipline and operational efficiency. Throughout the year, LyondellBasell strategically allocated capital, investing $1.8 billion into business growth while returning $1.9 billion to shareholders through dividends and share repurchases.

The company maintained an investment-grade balance sheet, with $8.0 billion in available liquidity, including $3.4 billion in cash at the end of the year. It also marked its 14th consecutive year of annual dividend growth, reinforcing confidence in its long-term profitability and shareholder value.

What Are LyondellBasell’s Key Strategic Priorities?

LyondellBasell remains focused on optimizing its portfolio and driving sustainable growth. As part of its long-term strategy, announced during the 2023 Capital Markets Day, the company aims to unlock $3 billion in incremental Normalized EBITDA by 2027. By the end of 2024, it had already achieved $1.3 billion of this target through efficiency improvements and the successful launch of new production capacity.

The company continues to expand its circular and low-carbon solutions business, which experienced 65% year-over-year volume growth. Additionally, it is strengthening its Advanced Polymer Solutions segment, particularly in high-value applications such as automotive and industrial materials. The Value Enhancement Program, which focuses on cost reduction and operational improvements, remains a core component of LyondellBasell’s profitability strategy.

How Is LyondellBasell Advancing Sustainability With Renewable Energy?

A key element of LyondellBasell’s growth strategy is its transition toward low-carbon and renewable energy solutions. To support this initiative, the company has signed two long-term power purchase agreements (PPAs) in Europe, ensuring stable, cost-effective access to renewable electricity.

Under a 15-year agreement with Vattenfall, LyondellBasell will receive 450 GWh of offshore wind energy annually to power its operations in Germany, including the MoReTec-1 plant in Wesseling. This facility is a significant milestone in the company’s sustainability journey, serving as its first commercial-scale advanced recycling plant, capable of processing plastic packaging waste from over 1.2 million German citizens per year.

Additionally, LyondellBasell signed a 10-year agreement with wpd, securing 79 GWh of onshore wind power to support its Ferrara, Italy, production site. This facility is one of the world’s largest for Ziegler-Natta catalyst development and production and plays a crucial role in manufacturing polypropylene and advanced polyolefin resins used in food packaging, medical applications, and automotive components.

By integrating renewable energy into its operations, LyondellBasell is taking significant steps to reduce its carbon footprint while enhancing energy reliability. These agreements align with the company’s broader commitment to sustainable product growth and reinforce its position as a leader in the global transition toward low-carbon industrial processes.

What Can Investors Expect From LyondellBasell in 2025?

Looking ahead, LyondellBasell remains cautiously optimistic about the macroeconomic landscape in 2025. The company expects a gradual recovery in polyolefin demand, particularly in North America, as economic conditions stabilize. Seasonal improvements in oxyfuels margins are anticipated, driven by increased gasoline consumption. Additionally, potential reductions in interest rates and moderating inflation could support a rebound in durable goods consumption, benefiting the company’s polypropylene and Intermediates & Derivatives businesses.

One of the most significant strategic moves for LyondellBasell in early 2025 is its planned exit from refining operations. This decision marks a major shift in its business model, allowing the company to concentrate further on high-value, sustainable chemical solutions. By shifting focus away from refining, LyondellBasell aims to accelerate growth in its circular and low-carbon solutions segment, leveraging its expertise in polymer innovation and sustainable feedstock development.

Can LyondellBasell Sustain Long-Term Growth?

Despite a challenging economic environment, LyondellBasell has demonstrated strong financial resilience and operational efficiency. Its ability to generate substantial cash flow, expand sustainable product growth, and secure renewable energy agreements positions the company well for long-term success. By maintaining a disciplined approach to capital allocation and investing in sustainability-driven innovations, LyondellBasell continues to reinforce its reputation as a global leader in the chemical industry.

With a strategic focus on portfolio optimization, cost-efficient operations, and low-carbon energy solutions, the company is prepared to navigate market challenges while delivering lasting value to its shareholders. As 2025 unfolds, LyondellBasell’s ability to execute its long-term vision will be crucial in determining its continued success in an evolving and increasingly sustainability-conscious global economy.