European chemical companies face lower profits in H1 2024 amid growing challenges

Chemical firms in Europe have announced their financial results for the first half of 2024, marked by challenges from global and regional factors. Oversupply and rising energy costs have eroded the region’s competitiveness, while slowdowns in key sectors like automotive and construction have further reduced demand. Consequently, most companies posted lower profits and reported slowdowns in their chemicals segment.

Additionally, the European chemicals industry has been struggling with aging infrastructure, resulting in the closure of outdated and unprofitable plants. LyondellBasell recently outlined its plan to review its European assets to enhance profitability, seek alternative owners, or rationalize operations. The company follows peers such as ExxonMobil, Sabic, and Indorama, all of which have announced plant closures in 2024. The latest financial results suggest that these measures may not be enough, and the industry is expected to face further plant shutdowns.

Oil giants’ chemicals segments see profits slump

British oil giant Shell reported a net profit of $10.8 billion in H1 2024, down by 8% from $11.8 billion in the same period previous year. The company’s adjusted earnings also declined by 5% from H1 2023 to $14 billion in the first half of 2024.

For the first six months of 2024, Shell’s chemical segments earnings totaled $1.7 billion, a decrease of 17% compared to $2 billion reported in H1 2023.

British BP reported a net profit of $2.1 billion for the first half of 2024, down visibly from $10 billion profit in H1 2023.

French TotalEnergies’ net income was $9.5 billion in the first six months of 2024, down by only 1% from H1 2023. However, the company’s Downstream segment, which includes Refining & Chemicals and Marketing & Services saw adjusted net operating income slump by 33% from H1 2023 to $2.2 billion in H1 2024.

Italian energy group Eni reported an adjusted net profit of €1.87 billion ($2 billion) in H1 2024, down by 30% from €2.68 billion ($2.96 billion) in H1 2023.

The company’s Chemicals segment, managed by its subsidiary Versalis, reported a proforma adjusted Ebit loss of €390 million ($431 million) in H1 2024, almost doubling the €179 million ($198 million) loss in the same period last year due to exceptionally adverse market conditions.

Chemicals and petchem producers also revealed lower profits

INEOS Group’s net profit for the first six months of 2024 was €65.1 million ($72 million) compared to €82.4 million ($91 million) in the same period previous year.

Germany’s BASF reported a net income of €1.8 billion ($2 billion) in H1 2024, down by 12.8% compared to €2 billion ($2.21 billion) in H1 2023.

BASF’s Chemicals segment’s earnings were up despite a downturn in the company’s overall net profit. The segment’s earnings before interest, taxes, depreciation, and amortization (EBITDA) were €896 million ($993 million) in the first half of this year, up by 8.7% from €825 million ($914 million) reported in the same period the previous year.

Belgian multinational chemical company Solvay’s EBITDA for the first half of 2024 declined by 25.5% year-over-year from €722 million ($800 million) to €538 million ($596 million).

German supplier of high-tech polymer materials Covestro’s EBITDA fell by 11.6% to €593 million ($658 million) in the first half of the year compared to €671 million ($745 million) reported in the first six months of 2023.

Repsol and OMV defy trend with earnings boost

Spanish multinational energy and petrochemical company Repsol registered net income of €1.6 billion ($1.77 billion) in the first half of 2024, an increase of 14.5% from the same period of 2023.

Austrian integrated oil and gas company OMV registered a net income of €1.2 billion ($1.32 billion) in the first half of 2024, visibly up by 33% from €918 million reported in the same period last year.