LyondellBasell Industries (LYB) Q2 2026 earnings summary

Executive summary

• Second quarter 2026 results were driven by unprecedented global petrochemical market disruption from the Middle East conflict, resulting in significant margin expansion and earnings growth, with notable gains in O&P Americas and I&D segments, but offset by a $734 million loss on divestiture of select European assets.

• Portfolio transformation advanced with the divestiture of four European assets and planned closure of Brindisi, focusing on advantaged, higher-value assets and less commoditized applications.

• Safety performance remained sector-leading, with a year-to-date total recordable incident rate of 0.1 and a strong commitment to safe operations.

• First half 2026 performance exceeded the same period in 2025, reflecting stronger margins across major segments and higher demand, despite lower sales volumes from asset divestitures.

• Continued progress on the Cash Improvement Plan, delivering fixed-cost reductions and lower capital expenditures.

Financial highlights

• Q2 2026 EBITDA excluding identified items reached $2.1 billion, more than tripling sequentially, with a 23% EBITDA margin; net income excluding identified items was $1.4 billion ($4.30 per share).

• Q2 2026 sales and operating revenues were $9.2 billion, up from $7.2 billion in the prior quarter and $7.7 billion in Q2 2025.

• Cash and cash equivalents at quarter end were $2.6 billion, with total liquidity of $7.1 billion.

• 80% EBITDA-to-cash conversion over the past 12 months, in line with long-term targets.

• $752 million cash from operating activities in Q2; $270 million in capital investments; $224 million returned to shareholders via dividends.

Outlook and guidance

• Market normalization is expected to take several quarters, with continued volatility due to ongoing Middle East conflict and supply chain disruptions.

• Q3 2026 operating rates projected: 85% for O&P Americas, 70% for O&P EAI, 85% for I&D, with planned maintenance impacting EBITDA.

• Announced $0.10/lb polyethylene price increase for August amid tight inventories and supply risks.

• Sustaining CAPEX expected to decrease post-Europe asset divestiture; total 2026 CAPEX guidance is ~$1.2 billion.

• Capital allocation priorities include safe operations, deleveraging, maintaining dividends, and selective investment.