LYB Intrinsic Value – LyondellBasell Industries N.V. Reports Strong Q2 Profits Despite Lower Sales
August 10, 2023
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LYONDELLBASELL ($NYSE:LYB): Despite the global pandemic, the company saw impressive profits in the second quarter of 2023. They reported a net income of $715 million, or $2.18 per share, significantly beating analysts’ expectations of $1.83 per share.
In addition, the company’s earnings were driven by cost-saving initiatives such as improved operational efficiencies. Unfortunately, sales in the quarter came up short of expectations at $7.2 billion, missing the consensus forecast of $7.4 billion. This was primarily due to lower demand for plastics and chemicals in certain markets as a result of the pandemic. Despite this, the company was able to offset some of the shortfall through increased demand for petrochemicals and polymers in other regions during the quarter. Overall, LyondellBasell Industries N.V. reported a strong quarter despite lower sales due to the pandemic. The company was able to leverage its cost-saving initiatives and improved operational efficiencies to generate higher profits than analysts’ estimates.
Earnings
In its earning report of FY2023 Q2 ending June 30 2021, LYONDELLBASELL INDUSTRIES N.V reported total revenue of 11.56B USD and net income of 2.06B USD, indicating a strong quarter despite lower sales compared to the previous year. Total revenue has decreased by 22.1% compared to the same quarter last year, while net income has increased by 25.6%, resulting in increased profitability. Despite the decreased total revenue, management has successfully increased profitability year-on-year.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for LYB. More…
| Total Revenues | Net Income | Net Margin |
| 43.01k | 2.1k | 5.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for LYB. More…
| Operations | Investing | Financing |
| 4.79k | -1.69k | -1.72k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for LYB. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 36.68k | 23.74k | 39.75 |
Key Ratios Snapshot
Some of the financial key ratios for LYB are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 12.8% | 8.5% | 7.1% |
| FCF Margin | ROE | ROA |
| 7.5% | 14.9% | 5.2% |
Market Price
The company opened at $95.2 and closed at $95.7, representing a slight decrease of 0.7% from the prior closing price of 96.4. Despite the decrease in sales, the company managed to report a 7% increase in net income compared to the same period last year. This was largely attributed to cost-cutting measures and improved operational efficiency.
The strong second quarter results reflect the strength of LyondellBasell’s business model and its ability to weather market volatility. Despite the challenges posed by the pandemic, the company is well-positioned to continue to deliver strong results in the quarters ahead. Live Quote…
Analysis – LYB Intrinsic Value
GoodWhale has analyzed the fundamentals of LYONDELLBASELL INDUSTRIES N.V. and found that the fair value of their share is around $71.9. This was calculated using our proprietary Valuation Line, which is based on multiple factors such as the company’s financials, industry trends, and current market conditions. At the current rate, LYONDELLBASELL INDUSTRIES N.V stock is trading at $95.7, which is overvalued by 33.1%. This means that investors should be cautious when considering investing in the company, as the stock may be overpriced due to a number of factors. More…
Peers
LyondellBasell Industries NV is a global chemical company with operations in over 80 countries. The company produces a wide range of products, including chemicals, plastics, and fuels. LyondellBasell is one of the world’s largest chemical companies, with revenues of over $30 billion in 2017. The company’s competitors include OCI NV, Brenntag SE, and Solvay SA.
– OCI NV ($LTS:0QGH)
OCI NV is a Netherlands-based chemical company. It produces and sells nitrogen-based fertilizers, industrial chemicals and natural gas. The company has a market cap of 8.57B as of 2022 and a Return on Equity of 66.91%. OCI NV is a leading provider of nitrogen-based fertilizers and industrial chemicals. The company operates in over 80 countries and employs over 24,000 people.
– Brenntag SE ($OTCPK:BNTGY)
Brenntag SE is a global leader in chemical distribution. They provide chemistry solutions for industry and commerce. The company has a market cap of 8.65B as of 2022 and a Return on Equity of 16.33%. Brenntag SE has a long history of success and is a trusted partner for their customers.
– Solvay SA ($LTS:0NZR)
Solvay SA is a Belgium-based company engaged in the chemicals sector. It operates in three business segments, namely, Advanced Materials, Performance Chemicals and Functional Polymers. The Advanced Materials segment provides products for the aerospace, automotive, electronics and energy markets, among others. The Performance Chemicals segment offers products for the detergents and cosmetics industry, as well as for the agricultural and mining sector. The Functional Polymers segment provides products for the construction, automotive and packaging markets. The Company has a portfolio of over 30,000 products, which are marketed under various brands, including Solvay, Anderol, Cytec, Delstar, Dyneamics, Forane, Ixef, Novecare, Rhodia and Sylvacur. As of December 31, 2011, it operated a total of 313 industrial sites worldwide.
Summary
Investors should take note of LyondellBasell Industries N.V.’s Q2 2023 earnings, which beat expectations at $715 million or $2.18 per share. However, sales fell short, hinting at potential weaknesses in the company’s operations. Nonetheless, the company remains a strong contender in the industry, and investors should take a closer look at its financials before making any decisions. Furthermore, upcoming earnings reports could provide more insight into the company’s prospects going forward.
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