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Braskem posts 8% sequential sales growth in Q3
12
Nov '14
Higher sales volume and the Brazilian currency depreciating by 2% against the US dollar, helped Brazilian petrochemical producer Braskem clock 8% sequential sales growth in the third quarter of 2014.

Braskem said it posted net revenue of R$12 billion in the third quarter of 2014, or 8% higher from the second quarter of 2014.

Braskem's sales of thermoplastic resins, which include polyethylene, polypropylene and PVC rose 5% from same quarter of 2013, to reach 939 kilo tons in the reporting quarter.

“This reflects third-quarter seasonality and the stronger performance of industries related to durable goods and the performance accompanied the growth in the Brazilian market,” Braskem explained.

Braskem's petrochemical complexes operated at capacity utilization rates of 90%, increasing 6 percentage points from the second quarter of 2104.

The resumption of operations on one of the lines at the Triunfo Petrochemical Complex from a shutdown and higher capacity utilization rate at Duque de Caxias Complex offset the shutdown at the ABC Complex.

Braskem recorded EBITDA of R$1.5 billion, benefitting from the higher spreads of petrochemical products in the international market and sales volume growth.

And its leverage, as measured by the ratio of net debt to EBITDA, declined slightly to 2.71 times.

In October, Fitch revised its rating outlook for Braskem from ‘Negative’ to ‘Stable’, reflecting the reduction in its leverage levels and continuous improvement in operating results.

Braskem posted net income of R$230 million in the third quarter of 2014, down 42% from the third quarter of 2013.

According to Braskem, despite the stronger demand in the third quarter, the scenario remains challenging due to the weak performance of the Brazilian economy.

In this context, Braskem considers it important that the Brazilian government continue to work on measures to stimulate growth in the country's manufacturing industry, focusing on costs and the availability of feedstock and electricity.

"Specifically in the chemical industry, the challenge is even greater, given the competition from U.S. petrochemical producers, which use competitive ethane derived from shale gas as feedstock," said Braskem CEO Carlos Fadigas.

"Negotiating a more competitive contract for petrochemical naphtha is of critical importance to our industry," he added.

Braskem invested nearly R$2 billion in the first nine months of 2014 on maintenance and expansion activities.

Of this, around 60% or R$1.2 billion was spent on scheduled maintenance shutdowns at the Triunfo and ABC Paulista complexes.

The rest was allocated to the expansion strategy in the Americas, which seeks to take advantage of competitive feedstock in Mexico.

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