LyondellBasell Industries N.V. (LYB) Balance Sheet

The sequential decline in equity, from $13.4B in 2024Q2 to $10.7B in 2026Q2, is consistent with the negative net income reported over the period. The reduction in total assets, despite a relatively stable PPE base, suggests that the company is not expanding its asset base, which may indicate a defensive posture. The trajectory implies that the balance sheet is absorbing the cyclical downturn, but the pace of erosion appears to be slowing, as equity stabilized between 2026Q1 and 2026Q2.

The debt-to-equity ratio has risen from 0.96 in 2024Q1 to 1.33 in 2026Q2, reflecting both higher absolute debt and a shrinking equity base. The absolute debt level has remained above $12.6B throughout the period, indicating that the company has not meaningfully deleveraged despite the downturn. This suggests that the company may be relying on debt to fund its dividend and capital expenditures, which could strain cash flow if the downturn persists. The D/E ratio of 1.33 is higher than peers like Dow (1.12) and Westlake (0.69), indicating a relatively higher leverage position.

The sharp decline in goodwill from $1.6B to $705M indicates a significant impairment charge, likely related to the Advanced Polymer Solutions acquisition, which has faced integration challenges. This impairment reduces the quality of assets, as a larger portion of the balance sheet is now tied to physical assets. The stability of PPE at around $17B suggests that the company is maintaining its asset base, but the impairment signals that past acquisitions have not generated the expected returns. The asset mix is becoming more heavily weighted toward tangible assets, which may reduce flexibility in a downturn.

The decline in retained earnings from $9.8B to $7.0B over the ten quarters indicates that the company has been distributing more to shareholders than it is earning. This is corroborated by the negative net income in several quarters and the consistent dividend payments. The erosion of retained earnings reduces the equity buffer and may limit the company's ability to absorb future shocks. The negative ROE of -6.5% in 2026Q2 further underscores the strain on equity returns.

The current ratio has declined from 2.12 to 1.64 over the period, suggesting that current liabilities have grown faster than current assets. While cash has remained around $2.6B, the company's ability to cover short-term obligations has weakened. This may indicate increased reliance on short-term debt or trade credit. The liquidity buffer appears adequate for now, but the trend warrants monitoring, especially if operating cash flow remains negative.