LyondellBasell Industries N.V. – Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026, and the six months ended on that date. LyondellBasell is a global manufacturer of chemicals and polymers. The company ceased operations at its Houston refinery in February 2025, reporting refining results as discontinued operations. The second quarter of 2026 was significantly impacted by the divestiture of select European olefins and polyolefins assets.
Key Financial Metrics
| Metric (Millions USD) | Q2 2026 | Q2 2025 | 6M 2026 | 6M 2025 |
|---|---|---|---|---|
| Revenues | $9,177 | $7,658 | $16,374 | $15,335 |
| Operating Income | $1,543 | $285 | $1,782 | $399 |
| Net Income (Attributable to Shareholders) | $558 | $114 | $681 | $289 |
| Diluted EPS | $1.71 | $0.34 | $2.10 | $0.88 |
| Operating Cash Flow (6M) | $483 | ($228) | ||
| Free Cash Flow (6M) | ||||
| Total Debt (Current + Long-term) | $12,910 (as of June 30, 2026) | |||
| Cash and Equivalents | $2,630 (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 20% year-over-year in Q2 2026, driven by a 33% increase in average sales prices due to industry supply constraints from the Middle East conflict. This was partially offset by a 5% volume decrease following the divestiture of European assets.
- Profitability Surge: Operating income jumped 441% year-over-year to $1.54 billion. Net income attributable to shareholders increased 389% to $558 million.
- Divestiture Impact: The company recognized a pre-tax loss of $734 million in Q2 2026 related to the sale of European assets (Berre, Münchsmünster, Carrington, Tarragona). This included a $310 million cash contribution to the divested group.
- Impairments: Total impairments were $74 million in Q2 2026, primarily a $74 million charge for a plastic waste sorting facility in Houston due to slower-than-anticipated circularity investment pace.
- Cash Flow: Operating cash flow for the first six months of 2026 was positive at $483 million, a significant improvement from a $228 million outflow in the same period in 2025.
Guidance, Outlook, and Risks
- Market Outlook: Management expects continued volatility in energy and petrochemical value chains due to the Middle East conflict, with supply recovery potentially extending into 2027.
- Operational Rates: Expected Q3 operating rates are 85% for O&P-Americas, 70% for O&P-EAI (Europe), and 85% for Intermediates and Derivatives (I&D). Planned downtime at the Clinton facility will impact polyolefin volumes in the second half of the year.
- Capital Allocation: Priorities include asset maintenance, disciplined deleveraging (including a scheduled note maturity in September 2026), maintaining dividends, and selective investment. The quarterly dividend was reduced in February 2026.
- Share Repurchases: No shares were repurchased in the first six months of 2026. A new authorization for up to 34.0 million shares was approved in May 2026, valid through November 2027.
- Risks: Key risks include raw material cost volatility, geopolitical instability, unplanned operating interruptions, and the ability to pass cost increases to customers.
Investor Verification Checklist
- Divestiture Finality: Verify the final post-closing adjustments to the $734 million loss on the European asset sale.
- Debt Maturity Wall: Confirm the funding strategy for the scheduled note maturity repayment in September 2026.
- Margin Sustainability: Assess the durability of current pricing power as Middle East supply constraints potentially ease in 2027.
- Impairment Scope: Monitor the status of the MoReTec-2 project and potential further impairments related to circularity investments.
- Operating Rates: Track actual Q3 operating rates against the 70-85% guidance, particularly for the European assets.