MOSCOW (MRC) -- Braskem swung to profit in the fourth quarter of 2015 with net earnings of 158 million Brazilian reais (USD39.1 million), from a R24-million loss one year earlier, said Chemweek.
The results were supported by an improved operational performance and hedge accounting, which better translates the effects from exchange variation on dollar-denominated liabilities to the company's results, Braskem says. Ebitda during the reported period amounted to R2.23 billion, decreasing 27% year-on-year (YOY) on lower sales volumes; lower resin and basic petrochemical price spreads in the international market, which were partially offset by the depreciation of the real; and lower exports due to a previously reported production incident at the company's Capuava, Brazil, steam cracker. Average capacity utilization at Braskem's plants during the quarter was 83%, also reflecting the unplanned stoppage at Capuava.
Braskem’s consolidated net revenue in the last quarter of 2015 totaled R14.11 billion, down 5% YOY—in dollar terms the drop was 13% YOY, to USD3.2 billion. The drop in sales reflects a contraction in sales volume caused by economic deterioration in Brazil, seasonality, and the unscheduled shutdown caused by the cracker incident, Braskem says. The sharp slowdown in key sectors of the Brazilian economy—services, construction, and infrastructure—continued to affect the labor market, reducing income levels and consequently household spending and investments. This caused Braskem to pursue opportunities in the export market, as a means of keeping the company's crackers in Brazil operating at high capacity utilization rates.
Operations in the United States and Europe generated USD615 million in net revenue, up 2% YOY, supported by better international spreads for polypropylene (PP) in the United States, and record PP sales volume for a third consecutive quarter. Meanwhile, Ethylene XXI, Braskem's 75-25 joint venture with Idesa (Mexico City), reached 99% completion in the fourth quarter. Polyethylene production is expected to start at the site before the end of the current quarter.
As MRC informed earlier, Brazilian petrochemical producer Braskem lifted the investment forecast for its flagship Etileno XXI complex in Mexico by 13% amid rising construction costs. The overall outlay for the project in the Coatzacoalcos region of Veracruz state has been revised to USD5.2bn, according to a Braskem securities filing.
Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
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