HOUSTON and LONDON - LyondellBasell Industries (NYSE: LYB) today announced net income for the fourth quarter 2023 of $185 million, or $0.56 per share.
During the quarter, the company recognized identified items of $226 million, net of tax. These items, which impacted earnings by $0.70 per share included non-cash asset impairments and costs incurred from plans to exit the refining business. Fourth quarter 2023 EBITDA was $639 million, or $910 million excluding identified items. In addition to the identified items, non-cash LIFO inventory valuation charges impacted pre-tax quarterly results by approximately $55 million.
Full year 2023 net income was $2.1 billion, or $6.46 per share. During the year, the company recognized identified items of $717 million, net of tax. These items, which impacted full year earnings by $2.19 per share included non-cash asset impairments and costs incurred from plans to exit the refining business. Full year 2023 EBITDA was $4.5 billion, or $5.2 billion excluding identified items.
'During the fourth quarter, LyondellBasell's businesses delivered exceptional cash conversion amid challenging market conditions while we rapidly moved forward with our strategy. We have a clear and focused roadmap to deliver a more profitable and sustainable growth engine for LYB. In the fourth quarter, we announced the divestiture of our Ethylene Oxide and Derivatives business and our decision to build the first catalytic advanced recycling plant using LYB's proprietary MoReTec technology. And just two weeks ago, we announced a new propylene and polypropylene joint venture in Saudi Arabia. These actions demonstrate our laser-sharp focus on execution,' said Peter Vanacker, LYB Chief Executive Officer.
Significantly lower fourth quarter gasoline crack spreads impacted refining and oxyfuels margins as well as the value of co-product fuels in the Olefins & Polyolefins Americas segment. In the North American polyethylene market, steady domestic demand and increased exports were supported by lower ethane raw material costs. Seasonally slow demand resulted in low operating rates for most businesses.
Throughout the year, petrochemical markets faced headwinds from soft global demand, capacity additions and economic uncertainty. Markets were broadly pressured by weak demand for durable goods, which impacted margins in the Olefins & Polyolefins, Intermediates & Derivatives and Advanced Polymer Solutions segments. In contrast, oxyfuels margins benefited from tight supply and strong summertime gasoline crack spreads, leading to record annual oxyfuels earnings for LYB.
LYB generated $4.9 billion in cash from operating activities during 2023. The company remained committed to a disciplined approach to capital allocation. In 2023, approximately $1.5 billion was reinvested in the business through capital expenditures while $1.8 billion was returned to shareholders through quarterly dividends and share repurchases. The company maintains a robust investment-grade balance sheet, with $7.6 billion of available liquidity at year-end.
LyondellBasell's strategy is focused on generating value-added growth to deliver $3 billion of incremental Normalized EBITDA by 2027(d). The company is accelerating value creation through decisive portfolio management, growth of manufacturing hubs to meet rapidly growing demand for recycled and renewable solutions and initiatives that are instilling an ownership culture. The LYB Value Enhancement Program underpins this culture shift, delivering a 2023 year-end run rate of more than $300 million of net income and $400 million of recurring annual EBITDA.
'In the ten months since we launched LyondellBasell's strategy, the passion, commitment and alignment of our global team is increasingly visible in our actions, culture and results. The successful startup of our new propylene oxide and oxyfuels plant is one example of our commitment to grow and upgrade our core businesses. We built strong foundations for our Circular and Low Carbon Solutions business by forming partnerships to source and sort plastic waste while moving forward on our first tranche of advanced recycling capacity. And our cultural transformation is well underway. Employee enthusiasm for the Value Enhancement Program allowed us to far exceed the original 2023 targets for the program. Outstanding cash conversion bolstered our investment-grade balance sheet and provided strong returns for LYB shareholders,' said Vanacker.
Fourth Quarter 2023 Highlights
Net Income: $185 million, $411 million excluding identified items(a)
Diluted earnings per share: $0.56 per share, $1.26 per share excluding identified items
EBITDA: $639 million, $910 million excluding identified items
Generated $1.5 billion of cash from operating activities resulting in 171% cash conversion(b)
Returned $406 million in dividends to shareholders
Took final investment decision to build first commercial-scale catalytic advanced recycling plant utilizing LYB's proprietary MoReTec technology
Announced divestiture of Ethylene Oxide and Derivatives business for $700 million Subsequent Event
Entered agreement to acquire 35% of NATPET, a Saudi Arabian PDH/PP joint venture, for $500 million
Full Year 2023 Highlights
Delivered resilient results amid bottoming markets
Net Income: $2.1 billion, $2.8 billion excluding identified items
Diluted earnings per share: $6.46 per share, $8.65 per share excluding identified items
EBITDA: $4.5 billion, $5.2 billion excluding identified items
Generated $4.9 billion in cash from operating activities
Achieved 98% cash conversion(b)
Launched new strategy
Three-pillar strategy to create a more profitable and sustainable growth engine for LYB
Significant progress on the strategy in 2023
Successful start-up of world's largest propylene oxide plant
Active management of portfolio through divestiture, capacity rationalization and investments
Unlocked more than $300 million net income and $400 million in recurring annual EBITDA through our Value Enhancement Program
Built foundation for a profitable Circular and Low-Carbon Solutions business
Continued commitment to disciplined capital allocation
Increased quarterly dividend by 5%, 13th consecutive year of annual dividend growth
Returned $1.8 billion to shareholders in dividends and share repurchases
Issued inaugural green bond for $500 million
OUTLOOK
In the first quarter of 2024, seasonally slow demand and economic uncertainty are expected to provide continued headwinds for most businesses. Relatively low ethane raw material costs are continuing to benefit North American Olefins & Polyolefins margins while regional demand is showing modest improvement. The company expects oxyfuels and refining margins to be within typical winter seasonal ranges. In China, January demand was subdued as buyers managed inventories around Lunar New Year holidays and growth remained uncertain. Spring and summer seasonal demand improvements are expected across global markets. LYB is aligning first quarter operating rates with global demand and expects to operate Olefins & Polyolefins Americas assets at approximately 80%, and both Olefins & Polyolefins EAI assets and Intermediates & Derivatives assets at approximately 75%.
ABOUT LYONDELLBASELL
We are LyondellBasell - a leader in the global chemical industry creating solutions for everyday sustainable living. Through advanced technology and focused investments, we are enabling a circular and low carbon economy. Across all we do, we aim to unlock value for our customers, investors and society. As one of the world's largest producers of polymers and a leader in polyolefin technologies, we develop, manufacture and market high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare.
FORWARD-LOOKING STATEMENTS
The statements in this release relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this release, the words 'estimate,' 'believe,' 'continue,' 'could,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'should,' 'will,' 'expect,' and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, market conditions, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; our ability to successfully implement initiatives identified pursuant to our Value Enhancement Program and generate anticipated earnings; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to manage costs; future financial and operating results; benefits and synergies of any proposed transactions; receipt of required regulatory approvals and the satisfaction of closing conditions for our proposed transactions; final investment decision and the construction and operation of any proposed facilities described; our ability to align our assets and expand our core; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; our ability to meet our sustainability goals, including the ability to operate safely, increase production of recycled and renewable-based polymers to meet our targets and forecasts, and reduce our emissions and achieve net zero emissions by the time set in our goals; our ability to procure energy from renewable sources; our ability to build a profitable Circular & Low Carbon Solutions business; the continued operation of and successful shut down and closure of the Houston Refinery, including within the expected timeframe; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations and our ability to comply with debt covenants and to repay our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the 'Risk Factors' section of our Form 10-K for the year ended December 31, 2022, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made. LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change, except as required by law.
This release contains time sensitive information that is accurate only as of the date hereof. Information contained in this release is unaudited and is subject to change. We undertake no obligation to update the information presented herein except as required by law.
LYONDELLBASELL INDUSTRIES N.V. 
