(Reuters) -LyondellBasell Industries said on Friday it is on track to achieve $1.1 billion in cost savings by 2026, as improving demand and a tight lid on costs helped the chemicals maker beat quarterly profit estimates and signal a steady recovery.
The company’s shares rose nearly 4% in premarket trading as the better-than-expected results eased some concerns around demand and rising raw material costs, particularly in Europe.
LyondellBasell said its cash improvement plan, launched earlier this year, remains on track to generate $600 million in incremental cash flow during 2025.
The company’s olefins and polyolefins Americas business saw improved profitability, driven by higher olefins margins and stronger polyethylene sales following plant turnarounds in Texas.
Polyolefins demand is showing early signs of recovery, the company said, with U.S. polyethylene sales volumes rebounding after a two-year slump and European volumes up 3% year-to-date.
LyondellBasell reported a net loss of $890 million, or $2.77 per share, for the third quarter, compared with a profit of $573 million a year earlier.
The loss included $1.2 billion in non-cash asset write-downs and other one-time charges, primarily related to its European operations and portfolio restructuring efforts.
Stringent regulatory environment in the region has prompted firms to reassess their operations and take cost-cutting measures.
LyondellBasell said it has advanced its portfolio overhaul, securing approvals to sell four European assets and planning brief shutdowns at plants in Germany and Texas for maintenance and market alignment.
The company said it expects seasonal weakness and higher feedstock costs to weigh on margins in the fourth quarter. However, global capacity reductions in China, Japan, South Korea and Europe are helping rebalance supply.
Excluding items, adjusted earnings came in at $1.01 per share, topping analysts’ expectations of 81 cents, according to data compiled by LSEG.
(Reporting by Pranav Mathur in Bengaluru; Editing by Krishna Chandra Eluri and Saumyadeb Chakrabarty)
