What does refining — LCM inventory valuation charge (benefit) mean?

Adjustments to inventory value to reflect current market prices when they fall below cost.

How do you interpret refining — LCM inventory valuation charge (benefit)?

A charge indicates falling market prices for refined products, while a benefit indicates a recovery in market value.

How does refining — LCM inventory valuation charge (benefit) compare across companies?

Standard inventory accounting practice for commodity-based businesses.

LyondellBasell Industries N.V. LYB Refining — LCM inventory valuation charge (benefit)

Discontinued — last reported Q3 '20

Similar metrics at other companies

DINORefining — Lower of cost or market inventory valuation adjustments

-$604M-421%

DINORefining — Lower of cost or market inventory valuation adjustment

$0—

DINORefining — Inventory Adjustments

-$318.9M—

DINORefining — Lower of cost or market inventory valuation adjustments (Note 8)

-$604M-421%

DINORefining — Excess of replacement cost over LIFO value of inventory

$39M—

DINOLubricants and Specialty Products — Lower of cost or market inventory valuation adjustment

$0—

Other financials

Income statement

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Revenue$7.2B-6.3%

Gross profit$701.0M+27.7%

Operating income$239.0M+110%

Net income$125.0M-29.4%

EPS (diluted)$0.38-29.6%

Balance sheet

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Cash & equivalents$2.6B+41.1%

Total debt$12.8B+5.1%

Total equity$10.0B-17.8%

Total assets$34.0B-3.5%

Cash flow

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Operating cash flow-$269.0M+53.5%

CapEx$269.0M-44.3%

Free cash flow-$538.0M+49.3%

Valuation

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Market cap$19.39B+14.0%

Enterprise value$29.54B+9.2%

P/S0.7×+0.1×

Profitability

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Gross margin9.2%-3.3pp

Operating margin-1%—

Net margin-2.7%—

FCF margin3.1%-1.6pp

Returns & leverage

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Return on equity-7.1%—

Debt / equity1.3×+0.3×

Current ratio1.5×-0.3×

Where this comes from

Reported directly by LyondellBasell Industries N.V. in its filing.

Tagged under the XBRL concept us-gaap:InventoryWriteDown.

The official record: LyondellBasell Industries N.V.’s 10-Q, filed October 29, 2021, on SEC EDGAR. View the filing →

Questions, answered.

What does refining — LCM inventory valuation charge (benefit) mean?: Adjustments to inventory value to reflect current market prices when they fall below cost.
How do you interpret refining — LCM inventory valuation charge (benefit)?: A charge indicates falling market prices for refined products, while a benefit indicates a recovery in market value.
How does refining — LCM inventory valuation charge (benefit) compare across companies?: Standard inventory accounting practice for commodity-based businesses.