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LyondellBasell says EBITDAR will lag forecast if weakness continues
By Jennifer Lanning Drey
Portland, Ore., June 3 - LyondellBasell's year-to-date EBITDAR was $42 million ahead of the company's operating forecast at the end of April but is likely to fall behind the projected budget in the coming months if weakness in its key markets continues, Alan Bigman, chief financial officer of LyondellBasell, said during a Wednesday conference call.
April EBITDAR was $188 million, representing an $87 million improvement over March EBITDAR. Year-to-date EBITDAR is $537 million.
"We're finding margins have been an area of weakness while cost control efforts have enabled us to be slightly ahead of plan for the company in aggregate," Bigman said.
Given that the economy is not improving as quickly as expected, LyondellBasell plans to take additional steps to further reduce its costs, newly appointed chief executive officer Jim Gallogly, said during the call.
Cost reductions will be key to LyondellBasell's ability to remain in compliance with the minimum EBITDAR requirement included in its debtor-in-possession credit facility, Bigman said.
The CFO declined to provide the company's current level of cushion.
"We're certainly not comfortable, but we do believe we can do it," he said during the question-and-answer portion of the call.
LyondellBasell had approximately $1.1 billion available under its DIP facility at May 31 and total liquidity of $2.5 billion, which included $722 million of cash and $660 million available on its asset-backed facility.
LyondellBasell is a Netherlands-based polymer, petrochemicals and fuels company. Its U.S. operations and one of its European holding companies filed for bankruptcy on Jan. 6. The Chapter 11 case number is 09-10023.
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