LyondellBasell (LYB) Q3 2025: Billion-Dollar Write-Downs Drive Net Loss

LyondellBasell (NYSE: LYB), a global powerhouse in the chemicals industry, recently released its financial results for the third quarter of 2025. For anyone looking to understand the health of the industrial economy, digging into the performance of a company that produces everything from plastics to industrial chemicals can be quite revealing. Let's break down the key numbers from their latest 10-Q filing to see what they tell us.

A Quarter Weighed Down by Write-Downs

At first glance, the headline numbers paint a difficult picture. LyondellBasell reported total sales of $7.7 billion for the quarter, a decrease from the $8.6 billion recorded in the same period last year. The real story, however, is on the bottom line. The company swung from a net income of $573 million in Q3 2024 to a significant net loss of $890 million in Q3 2025.

What caused such a dramatic reversal? The primary driver was a set of large, non-cash impairment charges totaling over $1.2 billion. An impairment charge is an accounting practice used when the value of a company's asset is deemed to be lower than what is stated on the balance sheet. In this case, LyondellBasell recorded a $972 million goodwill impairment and $230 million in other impairments. These write-downs pushed the company from what would have been a modest profit into a substantial loss.

To get a clearer picture of how the company's revenue flows through its costs to the final net loss, the following diagram visualizes the income statement for the quarter.

In the chart, the $794 million "Unallocated" category under revenue and cost of sales represents intersegment eliminations. This is an accounting adjustment that removes transactions between the company's own divisions to avoid double-counting revenue in the consolidated financial statements.

A Tale of Two Regions

A look at LyondellBasell's different business segments reveals a stark geographical divide in performance. The impairment charges were concentrated in two key divisions:

• Olefins & Polyolefins - Europe, Asia, International (O&P-EAI): This segment, which produces foundational plastics and chemicals, was hit with a $411 million impairment charge, including a $400 million write-down of goodwill. This led the segment to report an EBITDA loss of $381 million for the quarter, signaling severe market pressure in its non-Americas operations. EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a measure of a company's operating performance.
• Advanced Polymer Solutions (APS): This segment, which creates specialized polymer compounds, recorded a staggering $782 million impairment charge, resulting in an EBITDA loss of $746 million.

In contrast, the O&P-Americas segment remained profitable, generating $418 million in EBITDA. While this was down from $758 million in the prior year, it highlights the relative strength of the company's North American operations compared to the significant headwinds faced elsewhere.

Cash Flow Under Pressure

Beyond the headline loss, the company's cash generation also showed signs of strain. For the first nine months of 2025, cash from operating activities was $755 million, a steep decline from the $1.9 billion generated during the same period in 2024.

Despite the lower cash flow, the company maintained its commitment to shareholder returns, paying out $1.3 billion in dividends and repurchasing $201 million of its shares. Coupled with $1.4 billion in capital expenditures, this activity contributed to a decrease in the company's cash balance, which stood at $1.8 billion at the end of September, down from $3.4 billion at the start of the year.

The Bigger Picture

LyondellBasell's third-quarter results reflect a challenging environment for the global chemical industry, marked by weaker demand and margin compression, particularly in Europe and Asia. The significant impairment charges suggest the company is recalibrating its expectations for the long-term profitability of certain assets in these regions. While its Americas division provides a source of stability, the overall performance underscores the cyclical and competitive nature of the chemicals market. Investors will be keenly watching how management navigates these headwinds and steers the company's financial health in the quarters to come.