Braskem, the largest petrochemical company in the Americas, continued to deliver solid results by reporting EBITDA of R$ 2.6 billion, parent company net income of R$ 1.1 billion and free cash flow of R$ 1.8 billion in the first three months of 2018.
By reporting another quarter of good results, Braskem demonstrate its resilience despite adverse impacts, such as those caused by the interruption in power supply to its plants in Brazil's Northeast in March, the severe winter in the United States, the scheduled maintenance shutdown of its cracker in Triunfo, Rio Grande do Sul and the unscheduled shutdown of its chlor-alkali plant in Alagoas. In terms of production, Braskem's plants operated at capacity utilization rates of 92% in the United States and Europe (7 polypropylene plants), of 90% in Brazil (4 crackers) and of 86% in Mexico (3 polyethylene plants).
"These robust results clearly show that the company is prepared to meet head-on both predictable and unpredictable challenges," said Braskem CEO Fernando Musa. "This validates the success of our strategy based on diversifying geographically, balancing our feedstock profile and continuing to capture operating efficiency gains."
This perception also was confirmed by the improvement in the company's credit ratings. Standard & Poor's and Moody's upgraded Braskem's credit outlook from negative to stable in March and April, respectively. In this scenario, the company maintained investment grade ratings at Standard & Poor's (BBB) and Fitch Ratings (BBB-) and credit ratings above Brazil's sovereign risk at the three main rating agencies (S&P, Fitch and Moody's).
To support further improvement in its results and transparency, Braskem has been enhancing its corporate governance. At the Shareholders Meeting held in April, the Company formalized in its Bylaws the creation of a standing Compliance Committee and the requirement that the Board of Directors maintain at least 20% independent members.
Net income and dividends
In the first quarter of 2018, EBITDA amounted to R$ 2.6 billion, or US$ 818 million in U.S. dollar. Net income attributable to the parent company came to R$ 1.1 billion. Braskem's Shareholders Meeting in late April also approved the distribution of additional dividends in the amount of R$ 1.5 billion, bringing the total dividend for fiscal year 2017 to R$ 2.5 billion, or 61% of the period net income of R$ 4 billion, which is in line with the historical percentage. Free cash flow in the first quarter of 2018 stood at R$ 1.8 billion, representing an increase of R$ 1.34 billion on the fourth quarter of 2017.
Braskem will invest more this year than in 2017, with capital expenditure in 2018 expected to surpass R$ 2.8 billion. At the end of the first quarter, Braskem already had invested US$ 212 million of a total of up to US$ 675 million budgeted for its sixth polypropylene plant in the United States, which was allocated to the detailing engineering phase, which is 90% complete, and to equipment acquisitions. Construction of the plant, which will have production capacity of 450 kta, began this quarter and already has reached 16% completion. The first pieces of major equipment, such as reactors, already have been successfully delivered to the site in La Porte, Texas.
With a global, human-oriented vision of the future, Braskem's 8,000 members strive to improve people's lives by creating sustainable solutions in chemistry and plastics. It is the largest resin producer in the Americas, with an annual output of 20 million metric tons, including basic chemicals and petrochemicals, and R$50 billion in revenue in 2017. It exports to Customers in approximately 100 countries and operates 41 industrial units, located in Brazil, the United States, Germany, and Mexico - the latter in partnership with Mexico-based company Idesa.
For more information, please contact:
Fernando Rubino (55 11) 3643-2991 - firstname.lastname@example.org
Jessyca Trovão - (55 11) 3643-2769 - email@example.com
Pedro Orlandi - (55 11) 3643-2745 - firstname.lastname@example.org