Braskem S.A.: EBITDA reached US$310 million, increasing 5% from 1Q20
August 05 2020 - 09:30PM
PR Newswire (US)
SÃO PAULO, Aug. 5, 2020
/PRNewswire/ -- BRASKEM S.A. (B3: BRKM3, BRKM5 and
BRKM6; NYSE: BAK; LATIBEX: XBRK) announces today its results for
2Q20.
HIGHLIGHTS:
Braskem - Consolidated:
- Recurring EBITDA was US$310
million, up 5% on 1Q20, explained by: (i) lower feedstock
costs in Brazil, due to low costs
in inventories; and (ii) lower selling, general and administrative
expenses in Brazil and
Mexico. In Brazilian Real,
recurring EBITDA was R$1,655 million,
26% higher than in 1Q20, reflecting the depreciation in the
Brazilian Real against the U.S. dollar. In relation to the same
period last year, recurring EBITDA decreased by 25%, reflecting the
lower spreads in the international market and lower volumes due to
COVID, and increased 2% in Brazilian Real, given the weaker
Brazilian Real against the U.S. dollar.
- In the quarter, global sales of resins and chemicals recycled
came to 602 tons, representing decreases in relation to 1Q20 (-50%)
and 2Q19 (-2%), explained by the global slowdown caused by the
COVID pandemic.
- In 2Q20, the Company posted net loss of R$2,476 million, mainly explained by the
recognition of an additional provision of R$1.6 billion related to the geological event in
Alagoas and by the exchange variation impact on the financial
result due to Brazilian Real depreciation against U.S. dollar on
the net exposure in the amount of US$2,854
million.
- In July, the Company concluded a US$600
million subordinated debt issue through its wholly owned
subsidiary Braskem Netherlands Finance B.V., with maturity in 2081
and coupon of 8.5% per year. This is the first hybrid debt
instrument issued by a Brazilian company with 50% equity treatment
by Standard & Poor's and Fitch Ratings, and reinforces the
Company's commitment to continue implementing measures to
deleverage in order to be reassigned as an investment grade
company.
- Adjusted financial leverage measured by the ratio of net debt
to EBITDA in U.S. dollar ended the quarter at 6.77x.
- On a year to date base, the recordable and lost-time injury
frequency rate stood at 0.88 (events / 1MM HH), which is 72% below
the industry average.
- In June, Braskem signed agreements for the supply of
petrochemical naphtha for its industrial units in Bahia and Rio
Grande do Sul. The agreements, which terms are around five years
after the expiration date of the current agreements, establish the
supply of a minimum annual volume of 650 kton and, at the
discretion of Petrobras, a maximum additional volume of up to 2.8
million tons per year, at the price of 100% of the ARA
international reference. Furthermore, and to guarantee access to
the naphtha logistics system in Rio Grande do Sul, Braskem also
renewed the storage agreement with Petrobras and the transport and
storage agreement with Transpetro.
- In June, the Company signed an agreement to purchase renewable
energy from Canadian Solar Inc. The agreement will enable the
construction of a solar power plant with capacity of 152 MWp in the
northern section of Minas Gerais state that will guarantee the
supply of this energy to Braskem for 20 years.
Brazil:
- EBITDA from Brazil was
US$219 million (R$1,175 million), down 6% from 1Q20, and
representing 61% of the Company's consolidated segments EBITDA. The
decrease in EBITDA is mainly explained by the lower resin and
chemical sales in the Brazilian market due to the impact from COVID
on the Brazilian economy. Compared to 2Q19, the increase in EBITDA
is explained by lower feedstock costs and by lower general and
third-party service expenses.
- In order to create value to its clients, the Company has
expanded its chemical products portfolio, with the production of
premium gasoline for the Brazilian market. This product has a high
octane number and meets the new resolution requirements of the
National Petroleum Agency (ANP), which sets international quality
standards for gasoline sold in the Brazilian market
United States and
Europe:
- EBITDA in United States and
Europe was US$45 million (R$235
million), down 29% from 1Q20 and representing 12% of the
Company's consolidated segments EBITDA. The performance in the
quarter is mainly explained by the lower sales volume in
the United States and Europe, due to the global economic slowdown
caused by COVID. In relation to 2Q19, the decline in EBITDA is due
to the narrowing of PP spreads in the international market.
- During the quarter, the new PP plant in the United States reached 100% completion. The
plant's commissioning process began in 2Q20, and the first
production operations on commercial scale are expected for
3Q20.
Mexico:
- EBITDA in Mexico was
US$98 million (R$523 million), 25% higher than in 1Q20 and
representing 27% of the Company's consolidated segments EBITDA. The
increase in EBITDA was driven mainly by the higher sales volume and
lower general and administrative expenses. In relation to 2Q19,
EBITDA growth reflects the lower ethane price in the international
market.
- In this quarter, Braskem Idesa imported 42 thousand tons (8,000
barrels per day on average) of ethane from the United States to complement the supply of
ethane from Pemex, which corresponded to 13% of the polyethylene
capacity utilization rate of the Mexico Petrochemical Complex,
which stood at 80% in the quarter. Regarding the Fast Track
expected capacity of 12.8 thousand barrels per day, it reached 9.2
thousand barrels per day in June, or approximately 75% of the
expected capacity.
The full earnings release is available on the Company's IR
website: www.braskem-ri.com.br/home-en
Braskem will host conference calls to discuss its Results
THURSDAY, August 6 at 10:00 a.m. US ET.
Additional information may be obtained from the Investor
Relations Department at +55 11 3576-9531 or
braskem-ri@braskem.com.br.
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SOURCE Braskem S.A.
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