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LyondellBasell Expands Production in Thailand Through HMC JV

Zacks Equity Research

LyondellBasell Industries N.V. LYB is expanding footprint in Southeast Asia through its joint venture (JV) — HMC Polymers Company Limited. The JV will construct the fourth Polypropylene production line at its facility in the Map Ta Phut, Thailand.

Per the company, the unit will enable HMC to sustain domestic market share and help it address the projected 5-6% annual growth in demand for polymers in the Southeast Asian market.

Moreover, the unit is slated to be the most advanced unit globally, which will use the company’s Spherizone production technology. It will have annual production capacity of 250 kilotons. Notably, the Spherizone technology enables the production of highly-differentiated polypropylene products for applications including drainage, sewage and household fresh water pipes.

HMC Polymers makes polypropylene especially for China, Southeast Asia, Thailand, Australian and the Indian Subcontinent markets.

Shares of LyondellBasell have lost around 21.1% in the past year compared with the industry’s 33.7% decline.

Recently, the company provided a preliminary guidance for second-quarter 2019 financial results.

For the second quarter, LyondellBasell expects EBITDA to improve roughly 10-20% sequentially to the range of $1,575 million-$1,675 million. Net income is projected between $1,035 million and $1,080 million. Earnings per share (EPS) are projected between $2.79 and $2.91.

The company stated that North American integrated ethylene margins improved during the second quarter courtesy of lower feedstock costs. Moreover, oxyfuels are witnessing typical seasonal upside. However, lower margins in the refining business are a headwind.

Notably, the company has provided the guidance on a one-time basis related to the tender offer for its ordinary shares that started on Jun 10, 2019 and is slated to expire on Jul 8, 2019.

LyondellBasell Industries N.V. Price and Consensus


LyondellBasell Industries N.V. Price and Consensus

LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote


Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Flexible Solutions International Inc. FSI and AngloGold Ashanti Limited AU. These stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 27.3% for 2019. The company’s shares have gained 20.4% in the past year.

Flexible Solutions has projected earnings growth rate of 342.9% for the current year. The company’s shares have surged 149.1% in a year’s time.

AngloGold has an estimated earnings growth rate of 90.6% for the current year. Its shares have rallied 117.6% in the past year.

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