MOSCOW (MRC) -- Braskem’s consolidated net income in the first quarter of the year totaled 747 million reais (USD210.6 million), up from R 206 million one year earlier, said Chemweek.
The company's consolidated Ebitda was R3.06 billion, more than doubling year-on-year (YOY). In dollar terms. Ebitda amounted to USD780 million, up 54% YOY. Several factors contributed to the improved performance including higher total sales volume as well as better price spreads for basic petrochemicals including polypropylene (PP) in the United States and Europe, the company says. Net revenue during the quarter was up 19%, to R12.2 billion, driven by an average 37% YOY depreciation of the Brazilian currency, and higher resin export volumes, Braskem adds.
The average international spread for the resins produced by Braskem in Brazil in the first quarter was USD616/m.t., down 7% YOY, with higher spreads for all resins. For key basic petrochemicals, the average spread in the quarter was USD342/m.t., up 16% YOY, driven mainly by the spreads for benzene and para-xylene.
Net revenue of the company’s Brazilian operations—consisting of basic petrochemicals, polyolefins, vinyls, and chemical distribution—was R12 billion, up 14% YOY and representing 83% of Braskem's consolidated segments. Steam crackers operated at an average capacity utilization rate of 89%. Meanwhile, Braskem's European and US activities posted a combined net revenue of USD648 million, up 6% YOY. Consolidated revenue from overseas markets—principally sales generated in the United States and Europe, and exports from Brazil—excluding resales of naphtha and condensate, totaled R5 billion, or 44% of Braskem’s total revenue.
Braskem plans to invest R3.66 billion this year. About 49% of the funds allocated to operational investments include R1.6 billion in Brazil and USD48 million in the United States and Europe. A futher 32%, or USD329 million, of this investment budget is earmarked for the Braskem-Idesa joint venture. The jv registered an important milestone in the first quarter with the start-up of the Ethylene XXI cracker and production of the jv's first lot of polyethylene (PE). The jv started producing on-specification PE on 26 March and a second line came onstream on 28 April. The remaining 15% of the budget, or R537 million, will contribute to funding initiatives such as a previously announced feedstock-flexibility project at the Bahia, Brazil, cracker and improvement of industrial productivity at PP plants in the United States and Europe. Braskem, meanwhile, has signed a 15-year, propylene-supply agreement with Enterprise Products Partners (Houston) that will meet about 16% of Braskem's US and European propylene requirements from 2017.
Braskem says it will continue to implement its cost-cutting program, with potential recurring annualized savings of R400 million, the benefits of which should be fully attained in 2017.
Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC