LyondellBasell Industries N.V. (LYB) has reported a 19.66 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $952 million in the quarter, compared with $1,185 million for the same period last year. Revenue during the quarter dropped 11.63 percent to $7,365 million from $8,334 million in the previous year period. Gross margin for the quarter contracted 258 basis points over the previous year period to 19.85 percent. Total expenses were 83.04 percent of quarterly revenues, up from 80.20 percent for the same period last year. That has resulted in a contraction of 284 basis points in operating margin to 16.96 percent.
Operating income for the quarter was $1,249 million, compared with $1,650 million in the previous year period.
“Third quarter earnings were $2.31 per share; remaining on a 2016 annual pace that exceeds $9.00 per share. During the quarter and throughout the year, the strong contribution from our European olefins and polyolefins business has demonstrated the geographic balance within our portfolio. This has been particularly significant as our North American olefins and polyolefins business results have been impacted by a heavy planned maintenance schedule. Both regions experienced continued strong polyolefin demand. Within our refining business, operating disruptions impacted third quarter results,” said Bob Patel, LyondellBasell’s chief executive officer.
Operating cash flow declines
LyondellBasell Industries N.V. has generated cash of $1,332 million from operating activities during the nine month period, down 24.66 percent or $436 million, when compared with the last year period. The company has spent $459 million cash to meet investing activities during the nine month period as against cash inflow of $67 million in the last year period
The company has spent $1,195 million cash to carry out financing activities during the nine month period as against cash outgo of $1,684 million in the last year period.
Cash and cash equivalents stood at $740 million as on Sep. 30, 2016, down 49.80 percent or $734 million from $1,474 million on Sep. 30, 2015.
Working capital declines
LyondellBasell Industries N.V. has witnessed a decline in the working capital over the last year. It stood at $5,243 million as at Sep. 30, 2016, down 12.69 percent or $762 million from $6,005 million on Sep. 30, 2015. Current ratio was at 2.22 as on Sep. 30, 2016, up from 2.16 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 36 days for the quarter from 62 days for the last year period. Days sales outstanding went up to 39 days for the quarter compared with 35 days for the same period last year.
Days inventory outstanding has decreased to 31 days for the quarter compared with 59 days for the previous year period. At the same time, days payable outstanding went up to 34 days for the quarter from 32 for the same period last year.
Debt moves up
LyondellBasell Industries N.V. has witnessed an increase in total debt over the last one year. It stood at $9,088 million as on Sep. 30, 2016, up 10.16 percent or $838 million from $8,250 million on Sep. 30, 2015. Total debt was 38.81 percent of total assets as on Sep. 30, 2016, compared with 34.47 percent on Sep. 30, 2015. Debt to equity ratio was at 1.49 as on Sep. 30, 2016, up from 1.12 as on Sep. 30, 2015.
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