MOSCOW (MRC) -- LyondellBasell Industries, the world’s biggest maker of polypropylene plastic, posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices, said Hydrocarbonprocessing.
Net income was USD2.23/share, compared with USD1.61 a year earlier, London-based LyondellBasell said in a statement Friday. Income from continuing operations was USD2.22, which exceeded the USD1.92 average estimate of 18 analysts compiled by Bloomberg. Sales were USD12.1 billion, compared with USD11.1 billion a year earlier, beating the USD11.5 billion average estimate.
CEO Jim Gallogly is expanding LyondellBasell’s US chemical plants as hydraulic fracturing in shale rock formations boosts supplies of natural gas and cuts raw-material costs. Polypropylene, used in bottle caps and carpets, and polyethylene, used in plastic bags, is mostly made from gas in North America.
"Integrated polyethylene margins in the US were up as much as 4 cents a pound, so that’s a big positive," Hassan Ahmed, a New York-based analyst at Alembic Global Advisors who recommends buying the shares, said yesterday by phone.
Operating earnings at LyondellBasell’s Americas olefins unit, which makes polyethylene and polypropylene, rose 3% on higher product prices, it said.
As MRC wrote before, LyondellBasell has received a key permit required in the company's multi-plant ethylene expansion program which, when fully operational, is expected to increase annual ethylene capacity by an estimated USD3.12 billion, for a total estimated capacity of USD19.9 billion in North America. The ethylene expansion program began in 2013 and represents a total investment of approximately USD1.3 billion in the company's Channelview, La Porte and Corpus Christi, Texas plants which benefit from shale gas production.
LyondellBasell moved its tax residence to the UK from the Netherlands last year to avoid payments on dividends and gain flexibility in managing its cash. LyondellBasell is run from Houston and remains incorporated in Rotterdam.
LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
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