LyondellBasell Industries (LYB) Provides Estimated Q1 Financial Results

LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world, today announced estimated first quarter financial results and provided an operational update. First quarter 2020 net income is expected to be in the range of $110 million to $180 million. EBITDA is estimated to be in the range of $610 million to $680 million, $1,055 million to $1,075 million excluding non-cash inventory valuation charges (LCM1).

Events surrounding the ongoing coronavirus pandemic and the significant drop in the price of oil continue to evolve and impact global markets for LyondellBasell's products. Currently, all of our major global manufacturing sites are operational and demand for products used in packaging and medical applications remains robust. LyondellBasell remains committed to the health and safety of our employees, contractors and communities and is following governmental policies and recommendations related to the virus. The Company's manufacturing operations have been designated as an essential industry to support society's needs during the pandemic in the majority of the regions in which we operate.

In response to lower demand for certain products, the Company has temporarily idled production at several small plants in the Advanced Polymer Solutions segment serving automotive end markets and appropriately reduced production rates at other plants. Lower oil prices and reduced demand for transportation fuels are affecting both volumes and margins for our Refining segment and Oxyfuels & Related Products business. These impacts are expected to adversely affect our results during the second quarter of 2020.

Since the full extent of the pandemic and the drop in oil price remains uncertain, the Company has developed strategies and is implementing measures to respond to a variety of economic scenarios. To reduce operational and financial risk, the Company is postponing selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA plant in Houston. We currently expect that these actions will reduce 2020 capital expenditures by approximately 20 percent from our prior guidance of $2.4 billion to our current outlook of $1.9 billion. Additionally, we expect that aggressive inventory management combined with reduced pricing for raw materials and products will provide a meaningful influx of cash from working capital. The Company is also accelerating initiatives to extend our leadership in cost efficiency.

As of March 31, 2020, our total debt was $13.7 billion with available liquidity of $3.2 billion, including $1.8 billion in cash and short-term investments. The Company is currently evaluating a debt issuance and anticipates that any net proceeds would be utilized for general corporate purposes, including to increase our liquidity, and manage short-term debt maturities. We believe that our disciplined approach to capital deployment with a focus on a strong investment grade balance sheet and significant liquidity will serve us well during these challenging times.

We will provide full details on results for the first quarter in our earnings release and teleconference which are scheduled for May 1, 2020. Please refer to the end of this release for an explanation of LyondellBasell's use of EBITDA and Table 1 for reconciliations of net income to EBITDA and EBITDA excluding LCM.

1 LCM stands for "lower of cost or market." An explanation of LCM and why we have excluded it from certain financial information can be found under "Information Related to Financial Measures."

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