LyondellBasell Industries on Friday announced a near-halving of its quarterly dividend, cutting the distribution to $0.69 per share from $1.37 - a decline of 49.6 percent. The reduced quarterly payout lowers the company's annual dividend to $2.76.
The company said the dividend will be paid on March 9 to shareholders of record on March 2, and the ex-dividend date is Feb. 27. At the newly stated rate, the dividend implies a yield of roughly 5 percent.
Market analysts framed the move as broadly anticipated. Vital Knowledge stated that the cut was widely expected, observing that "most people assumed the dividend would be cut as 1.37 was far beyond the company’s EPS for the last several quarters." The firm added that even the lower payout "represents a very high ratio," and noted that other chemicals producers have also trimmed dividends during the sector's protracted slump. Vital Knowledge cautioned the decision "will likely trigger selling pressure."
Shares of the company initially dropped in premarket trading following the announcement but later settled to a decline of about 0.1 percent.
Earlier this month Morgan Stanley analysts had flagged the company was attempting to protect its dividend while also observing that "metrics are getting tough." Company management had previously detailed cash-flow limitations for 2026, including an estimated $1.8 billion that would have been necessary to sustain the prior dividend level. Management also noted there are restrictions that prevent share repurchases this year.
LyondellBasell signaled it believes the chemicals cycle likely reached a trough in the fourth quarter of 2025, but said visibility remains limited. Morgan Stanley reported the company pointing to early signs of demand improvement, a slowdown in new plant construction in China, and the potential for supply tightening in Europe as factors that could influence industry conditions going forward.
Despite those possible early indicators of improvement, the company emphasized that restoring cash flow is the immediate priority. The dividend reduction underscores the pressure that the prolonged downturn in the chemicals sector has placed on the company's finances.
Key takeaways
- Dividend cut: Quarterly payout reduced from $1.37 to $0.69 per share, a 49.6 percent decrease, lowering the annual dividend to $2.76.
- Timing and yield: Payment set for March 9, record date March 2, ex-dividend Feb. 27; new payout implies about a 5 percent yield.
- Cash-flow focus: Management and analysts highlight cash-flow constraints for 2026, including roughly $1.8 billion to maintain the prior dividend and restrictions on buybacks.
Risks and uncertainties
- Market reaction: Vital Knowledge warned the cut "will likely trigger selling pressure," reflecting potential immediate downside for equity holders.
- Limited visibility: Although the company believes the chemicals cycle likely bottomed in Q4 2025, management acknowledged constrained visibility on the recovery.
- Capital restrictions: The need to preserve cash and the prohibition on share repurchases this year constrain capital-return options for investors.