LyondellBasell slashes dividend as chemicals downturn pressures cash flows

Investing.com -- LyondellBasell Industries announced on Friday that it has cut its quarterly dividend by almost half, reducing the payout to $0.69 per share from $1.37, marking a 49.6 percent decrease.

The move lowers the annual dividend to $2.76.

The dividend will be paid March 9 to shareholders of record March 2, with an ex-dividend date of Feb. 27. The new payout implies a dividend yield of about 5 percent.

Vital Knowledge analysts said in a note that the reduction was widely expected. According to the firm, “most people assumed the dividend would be cut as 1.37 was far beyond the company’s EPS for the last several quarters.”

It added that even the new payout “represents a very high ratio,” noting that other chemicals producers have also lowered dividends during the sector’s prolonged slump. While shares have rebounded recently amid a pro-cyclical market rotation, Vital Knowledge warned that the cut “will likely trigger selling pressure.”

The company’s shares initially tumbled in premarket trading but are now down just 0.1%.

The decision follows earlier commentary from Morgan Stanley this month, when analysts noted LyondellBasell was working to preserve its dividend but acknowledged that “metrics are getting tough.”

Management had outlined cash-flow constraints for 2026, including about $1.8 billion that would have been required to maintain the prior dividend and restrictions that prevent share repurchases this year.

LyondellBasell believes the chemicals cycle likely bottomed in the fourth quarter of 2025, though visibility remains limited.

According to Morgan Stanley, the company pointed to early signs of a demand recovery, a slowdown in new China plant construction, and potential supply tightening in Europe.

Still, restoring cash flow remains the near-term priority, and the dividend cut underscores the strain created by the industry downturn.

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