Braskem records net revenue growth in Q1 2014
ERJ staff report (TP)
Sao Paulo, Brazil − Brazilian petrochemical company Braskem recorded net revenue of R$11.8bn (€3.8bn) in the first quarter of 2014, or 10 percent more than in the fourth quarter of 2013.
The performance of net revenue in the period is due to the appreciation in the US dollar against the Brazilian real and by the recovery in petrochemical prices in export markets fuelled by stronger global demand.
In Brazil, domestic demand for thermoplastic resins in the quarter came to 1.3m tons (907,180 tonnes), in line with the previous quarter. Meanwhile, Braskem's sales amounted to 901,000 tonnes, virtually stable in relation to the fourth quarter of 2013. Compared to the same period of 2013, domestic demand grew three percent, driven by the good performance of industries focused on non-durable goods, while the Company's sales decreased two percent.
In the first quarter, Braskem's crackers registered an average capacity utilisation rate of 85 percent, which was affected by the scheduled maintenance shutdown on the main line of the Triunfo Complex in Rio Grande do Sul and by certain isolated events at the petrochemical complexes in Duque de Caxias, Rio de Janeiro and Mauá, São Paulo.
In line with its strategy to concentrate its investments in the petrochemical industry, Braskem sold to Odebrecht Ambiental the assets forming its water treatment unit at the Triunfo Complex, with the divestment generating a gain of R$277m (€90.9m) in the quarter.
As a result of the above factors, Braskem recorded EBITDA of R$1.6bn (€525.1m) in the first quarter of 2014. In US dollars, EBITDA came to US$690m (€226.5m). On a recurring basis, EBITDA was US$573m (€188m), or nine percent higher than in the previous quarter. Net income was R$396m (€130m), which benefitted from the divestment of the water treatment unit and from the improvement in operating performance.
The results achieved “basically reflect the healthy performance of the global economy”. Meanwhile, in Brazil, the environment “calls for caution and remains challenging”, especially with regard to the industry's level of competitiveness. The cost and availability of energy, the weak competitiveness of naphtha-based feedstocks compared to US shale gas and issues related to infrastructure and slow economic growth will require additional measures to restore the competitiveness of the country's industrial sector.
Braskem invested R$763m (€250.4m) in the first quarter of the year. Of this amount, 50 percent was allocated to maintenance and to increasing the productivity and reliability of its assets, while 45 percent went to the construction of the new petrochemical complex in Mexico to produce polyethylene, whose physical completion reached 66 percent at the end of March. (The remaining five percent was not disclosed in the press release.)
Although still in the economic and technical feasibility phase, the Appalachian Shale Cracker Enterprise, or Ascent, has already made “important” progress. In March, an agreement was signed with Antero Resources, an independent company engaged in the exploration and production of natural gas and oil. Although still subject to the final investment decision, the agreement assures the project proximity to suppliers of competitive feedstock.
"The Mexico project has been advancing on schedule. Meanwhile, we continue to work on the feasibility studies for Ascent, a project in the United States that will use shale gas as feedstock, and in Brazil we continue to dialogue with Petrobras on the Comperj Petrochemical Complex. Diversifying our feedstock profile through new gas-based projects will help Braskem become more and more competitive," said Carlos Fadigas, Braskem's CEO.
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Press release from Braskem
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