BRASKEM
Q1 core profit falls on higher costs / Strong Brazilian real props up net profit / Sustainability efforts intensified
 The Brazilian group has pushed ahead significantly with its sustainability initiatives (Photo: Braskem) |
Brazilian petrochemicals group Braskem (São Paulo; www.braskem.com) saw its first-quarter recurring EBITDA fall 30% to BRL 4.85 bn (EUR 930 mn) as input costs rose faster than revenue growth.
The costs of goods sold – comprising raw material prices and labour – increased 40% to BRL 21.60 bn, with the Brazil segment accounting for nearly three-fourths of it on higher prices of feedstocks.
Revenues, however, advanced only 18% to BRL 26.73 bn. The prices of polyethylene, polypropylene, and other products failed to keep up with the lofty levels of the prior-year quarter while sales volume of resins in Brazil and PP in Europe declined.
Although the pre-tax profit before the financial expenses/revenues and currency swings had shrunk by 44%, the appreciation of the Brazilian currency was a tailwind that propelled the net profit 56% further to BRL 3.88 bn.
The US and Europe segment’s revenues gained 3% to BRL 7.26 bn due to the elevated propylene price in Europe. PP sales volumes in the US were also buoyant because product availability had improved. But recurring EBITDA – which accounts for one-third of the group – slumped 11% to BRL 1.53 bn.
A similar picture is reflected in the Brazil segment. Sales spiked 21% to BRL 18.37 bn, thanks to higher prices of PVC and main chemicals in the international market. Recurring EBITDA, which represents half of the group, plunged 51% to BRL 2.51 bn.
The Mexico segment, however, went against the trend. Both sales and recurring EBITDA at BRL 1.76 bn and BRL 708 mn, respectively, improved, by 51% and 36%. The reason was that Mexico’s state-owned energy group Pemex (Mexico City; www.pemex.com) supplied more feedstock than stipulated in the revised ethane supply agreement signed in October 2021, a deal that had resolved its long-standing feud with Braskem Idesa (Mexico City; www.braskemidesa.com.mx). This enabled the PE plants to operate at 80% capacity compared with 58% in the prior-year quarter. The 2020 supply row with PEMEX had contributed to low production levels last year (see Plasteurope.com of 18.10.2021).
Braskem has recently intensified its sustainability efforts to achieve 1 mn t of green PE production capacity by 2030. It has clinched strategic and financial partnerships, such as the step taken by joint venture partner Terra Circular Industries (Sittard, the Netherlands), to incorporate Dutch recycling company ER Plastics (Weert; www.erpbv.com) into the JV (see Plasteurope.com of 17.05.2022).
Related: Braskem collaborates with Lummus on green ethylene
By 2025, Braskem seeks to reach 300,000 t of thermoplastic resins and chemical products with recycled content. By 2030, the target is 1 mn t.
The costs of goods sold – comprising raw material prices and labour – increased 40% to BRL 21.60 bn, with the Brazil segment accounting for nearly three-fourths of it on higher prices of feedstocks.
Revenues, however, advanced only 18% to BRL 26.73 bn. The prices of polyethylene, polypropylene, and other products failed to keep up with the lofty levels of the prior-year quarter while sales volume of resins in Brazil and PP in Europe declined.
Although the pre-tax profit before the financial expenses/revenues and currency swings had shrunk by 44%, the appreciation of the Brazilian currency was a tailwind that propelled the net profit 56% further to BRL 3.88 bn.
The US and Europe segment’s revenues gained 3% to BRL 7.26 bn due to the elevated propylene price in Europe. PP sales volumes in the US were also buoyant because product availability had improved. But recurring EBITDA – which accounts for one-third of the group – slumped 11% to BRL 1.53 bn.
A similar picture is reflected in the Brazil segment. Sales spiked 21% to BRL 18.37 bn, thanks to higher prices of PVC and main chemicals in the international market. Recurring EBITDA, which represents half of the group, plunged 51% to BRL 2.51 bn.
The Mexico segment, however, went against the trend. Both sales and recurring EBITDA at BRL 1.76 bn and BRL 708 mn, respectively, improved, by 51% and 36%. The reason was that Mexico’s state-owned energy group Pemex (Mexico City; www.pemex.com) supplied more feedstock than stipulated in the revised ethane supply agreement signed in October 2021, a deal that had resolved its long-standing feud with Braskem Idesa (Mexico City; www.braskemidesa.com.mx). This enabled the PE plants to operate at 80% capacity compared with 58% in the prior-year quarter. The 2020 supply row with PEMEX had contributed to low production levels last year (see Plasteurope.com of 18.10.2021).
Braskem has recently intensified its sustainability efforts to achieve 1 mn t of green PE production capacity by 2030. It has clinched strategic and financial partnerships, such as the step taken by joint venture partner Terra Circular Industries (Sittard, the Netherlands), to incorporate Dutch recycling company ER Plastics (Weert; www.erpbv.com) into the JV (see Plasteurope.com of 17.05.2022).
Related: Braskem collaborates with Lummus on green ethylene
By 2025, Braskem seeks to reach 300,000 t of thermoplastic resins and chemical products with recycled content. By 2030, the target is 1 mn t.
24.05.2022 Plasteurope.com [250326-0]
Published on 24.05.2022
German version of this article...