Lyondell rides out hurricanes in Q3
Lyondell Chemical Co.’s Propylene Oxide and Related Products segment has reported third quarter earnings (EBITDA) of $321m, more than double its level for the same period last year. Sales rose 41% to $1848m at the business, which produces propylene oxide (PO) and its derivatives propylene glycol, propylene glycol ethers, butane diol feedstock, as well as styrene, MTBE fuel additives, and toluene diisocyanate (TDI). The Houston company linked the gains to better margins on its increased PO and PO derivative product margins, particularly in its MTBE activities, where results improved by about $210 million. This more than offset a $20m decline in earnings in the company’s TDI business as well as lower profitability in the styrene sector, Lyondell said 27 October. Segment operating income in the third quarter 2005 included a charge of $195 million for impairment of the carrying value of Lyondell's Lake Charles, Louisiana, toluene diisocyanate (TDI) facility which has been shutdown. Commenting on Lyondell’s group-wide performance, Dan Smith, president and CEO, said: “"While pricing trends were established in advance of the hurricanes, these changes accelerated and became far more pronounced as a result of the hurricane-related disruptions. While third-quarter results were obviously reduced by the storms and impairment of our Lake Charles TDI plant, the breadth of our product portfolio served us well during the quarter.” Looking forward, Smith said: “At this time, with the exception of LCR and previously scheduled maintenance turnaround activity at one propylene oxide plant, all of our major plants are operating at or near full capacity, and we believe our chemical businesses are well positioned to respond to post-hurricane supply/demand tightness. The pressures and uncertainties caused by extremely high and volatile raw material costs continue to be a concern, but are somewhat mitigated by our greater reliance on crude oil-based raw materials rather than natural gas.