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August 3, 2025 • 3 min read
LyondellBasell Industries (LYB), a titan in the global chemical industry, recently released its financial results for the second quarter of 2025. As a major producer of plastics, chemicals, and fuels, the company's performance is often seen as a bellwether for global industrial demand. A dive into its latest 10-Q filing reveals a quarter marked by significant challenges, with notable declines in profitability and revenue compared to the prior year.
For the three months ending June 30, 2025, LyondellBasell reported net income of $115 million, a steep fall from the $924 million earned in the same period of 2024. This drop in profit came as total revenues decreased to $7.7 billion from $8.7 billion year-over-year.
The following flow diagram provides a visual breakdown of the company's income statement for the quarter, illustrating how revenues were consumed by costs and expenses to arrive at the final net income.
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A key factor in the profit decline was a significant drop in operating income, which fell to $285 million from nearly $1 billion in Q2 2024.
A closer look at the company's business segments reveals where the pressures were most acute. EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, is a useful metric for comparing the core operational profitability of different business units.
Olefins & Polyolefins - Americas (O&P-Americas): This core segment, which produces foundational plastics like polyethylene and polypropylene, saw its EBITDA cut by more than half, falling to $313 million from $670 million in Q2 2024.
Olefins & Polyolefins - Europe, Asia, International (O&P-EAI): The international segment faced even stronger headwinds. Its EBITDA plummeted to just $2 million for the quarter, down from $70 million a year ago. The segment also recorded a $32 million impairment charge, signaling financial strain on certain assets and reflecting challenging market conditions outside the Americas.
Intermediates and Derivatives (I&D): This segment's EBITDA appeared to collapse, falling to $286 million from $794 million. However, the 2024 figure was significantly boosted by a $293 million pre-tax gain from the sale of a business. Excluding that one-time gain, the underlying year-over-year decline is less dramatic, highlighting the importance of looking beyond the headline numbers.
The challenges in profitability directly impacted the company's cash generation. For the first six months of 2025, LyondellBasell experienced a net cash outflow of $228 million from operating activities. This is a stark reversal from the same period in 2024, when operations generated over $1.2 billion in cash.
Despite this operational cash burn, the company continued to return capital to its shareholders, paying $878 million in dividends and spending $201 million on share repurchases during the first half of the year. The company is also actively managing its portfolio, with $832 million in assets now classified as "held for sale," primarily related to its European operations.
LyondellBasell's second-quarter results paint a picture of a chemical giant navigating a difficult global economic landscape. The significant drop in profitability and operating cash flow, especially from its international operations, underscores the cyclical nature of the industry.
Looking toward the third quarter, the company has provided an operational outlook, expecting its European O&P assets to run at a lower rate (75%) than its American O&P assets (85%). This suggests the pressures abroad are expected to continue. Investors will be watching closely to see how LyondellBasell balances its strategic divestitures, operational challenges, and commitment to shareholder returns in the quarters to come.
Last updated: August 3, 2025