LyondellBasell generated a sharp second-quarter earnings recovery as geopolitical instability restricted global petrochemical supply, improved polymer pricing, and created opportunities for the company to increase production at its advantaged North American facilities.
Adjusted EBITDA reached approximately $2.13 billion, compared with $715 million in the second quarter of 2025. The result also increased substantially from $615 million during the first quarter of 2026.
The year-over-year increase was approximately 197%, meaning adjusted EBITDA nearly tripled.
LyondellBasell attributed the improvement to deliberate commercial actions, favorable market conditions, and the relative strength of its asset portfolio.
Geopolitical instability created supply-constrained conditions across each of the company’s operating segments. Global disruptions tightened polymer supply, expanded product margins, and supported stronger pricing for co-products.
LyondellBasell responded by increasing production rates to meet customer demand and capture the stronger market environment.
The company operated its North American Olefins and Polyolefins assets at approximately 90% utilization during the quarter.
The higher operating rate allowed LyondellBasell to benefit from expanding polymer margins and favorable co-product pricing associated with reduced global supply.
The company’s North American assets also benefit from access to comparatively advantaged feedstocks, strengthening their competitiveness against facilities in higher-cost regions.
Olefins and Polyolefins operations in Europe, Asia, and international markets also benefited from improved polymer spreads and stronger contributions from joint ventures.
Intermediates and Derivatives generated higher earnings from improved margins in oxyfuels, methanol, and propylene oxide derivatives.
Those gains were partly offset by an unplanned outage at the Bayport propylene oxide and tertiary butyl alcohol facility.
LyondellBasell restarted the Bayport facility during June and exited the quarter at full operating rates. Management expects the restart to support stronger volume performance during the second half of 2026.
Second-quarter sales and other operating revenue increased approximately 20% to $9.18 billion from $7.66 billion.
Revenue also increased substantially from $7.20 billion in the first quarter, reflecting stronger pricing, improved product margins, and higher operating rates.
Adjusted net income reached approximately $1.40 billion, compared with $202 million in the prior-year quarter.
Adjusted diluted earnings per share increased to $4.30 from $0.62.
Reported results were significantly lower than adjusted performance because of restructuring and portfolio-related charges.
LyondellBasell reported net income of $559 million, or $1.71 per diluted share. The company recognized $842 million of identified items after taxes, reducing quarterly earnings by $2.59 per share.
The largest adjustment was a $734 million pre-tax loss associated with the sale of selected European Olefins and Polyolefins assets.
That loss reduced diluted earnings by approximately $2.27 per share.
LyondellBasell completed the divestiture of four European assets during May as part of its effort to reduce structural costs and reposition its portfolio toward facilities connected to more favorable feedstocks.
The company said the transaction should increase its resilience, improve flexibility, and strengthen its ability to capture market upside across industry cycles.
However, the transaction required LyondellBasell to make a $310 million cash contribution when the divestiture closed.
The quarter also included a $74 million impairment associated with a plastic-waste sorting facility in Houston.
The impairment represented most of the company’s $89 million of first-half asset write-downs. Another $15 million related to property and equipment within the European Olefins and Polyolefins business.
LyondellBasell recorded another $31 million of costs connected to its Cash Improvement Plan and $30 million of site-closure expenses.
The site-closure costs primarily included employee-related charges associated with the planned closure of a polypropylene facility in Brindisi, Italy.
The company continues to target $500 million of incremental cash generation through its Cash Improvement Plan by the end of 2026.
The initiative is focused primarily on reducing fixed costs and lowering capital expenditures.
LyondellBasell generated $752 million in operating cash flow during the quarter.
Cash generation was significantly lower than adjusted EBITDA because higher product prices and increased operating rates required additional working capital.
The company spent $270 million on capital expenditures and returned $224 million to shareholders through dividends.
LyondellBasell disclosed no second-quarter share repurchases as management emphasized balance-sheet improvement and disciplined deleveraging.
The company plans to repay a scheduled note maturity during September while maintaining its dividend and selectively investing in projects expected to create long-term value.
LyondellBasell ended June with approximately $2.63 billion in cash and cash equivalents.
Total liquidity reached approximately $7.09 billion, including availability under its revolving credit and U.S. receivables facilities.
Management expects the supply environment to remain volatile.
The pace and magnitude of production returning from conflict-affected regions remain uncertain, and LyondellBasell believes the recovery period could extend into 2027.
The company does not currently expect material deterioration in demand across its major end markets. However, uncertainty around prices could temporarily change normal customer purchasing behavior.
For the third quarter, LyondellBasell expects operating rates of approximately 85% for North American Olefins and Polyolefins assets, 70% for European facilities, and 85% for Intermediates and Derivatives.
The forecast reflects planned maintenance, expected global demand, and downtime at the Clinton polyolefins facility.
LyondellBasell’s second-quarter results demonstrate how quickly earnings can improve when supply disruptions tighten petrochemical markets and allow advantaged producers to increase operating rates.
The company’s restructuring charges obscured that recovery in reported results, but adjusted earnings showed substantial margin expansion and a significant improvement in the profitability of its continuing operations.
KEY QUOTES:
“We responded quickly to the global supply disruption by increasing operating rates to serve our customers, demonstrating the flexibility and resilience of our global asset base and supply chain.”
“These actions are repositioning LYB with a structurally lower cost base providing improved margins and enhanced cash generation.”
Peter Vanacker, Chief Executive Officer Of LyondellBasell
