Ethylene & propylene sales down in Q3, BRASKEM

12 Nov '10

4 min read

In the case of the aromatics, total BTX sales posted growth of 5% in relation to 2Q10. Operational problems in the 2nd generation, which affected domestic consumption of benzene, were offset by exports.

Braskem's crackers continued to operate at high operating rates, and the continued recovery in the operation of Quattor's assets increased the average operating rate to 91% in 3Q10. Ethylene production volume was 862 ktons, up 4% from 2Q10.

In 9M10, ethylene production volume was 2,485 ktons, for growth of 8% on 9M09. Total ethylene and propylene sales grew by 15% in the period.

Performance:

EBITDA
Braskem's consolidated EBITDA in 3Q10 was R$1,030 million, virtually in line with the previous quarter. The solid growth of 22% in sales volume of resins was counterbalanced by a 9% drop in resin prices as a result of the decrease in international prices and the Real appreciation. In U.S. dollar terms, EBITDA in the quarter was US$589 million. EBITDA margin stood at 14.2% in 3Q10, down 1.8 p.p. from 2Q10, which is explained by the compression in resin-naphtha spreads in the quarter and the non-recurring expenses from the Quattor and Braskem America transactions, and also extraordinary expenses with advertising. EBITDA margin excluding naphtha/condensate/oil resales was 15.6%.

This EBITDA includes: (i) the negative impact of R$ 73 million on COGS from the litigation settlement signed with the Bahia State Union of Petrochemical, Chemical and Plastics Manufacturers, as announced in the Notice to the Market dated September 10; (ii) the positive variation of R$ 93 million from PIS/COFINS tax credits, mainly on fixed assets, resulting from improvements in the credit analysis process; and (iii) the R$35 million non-recurring expenses incurred in the quarter related to the Quattor and Braskem America transactions and advertising expenses, as explained earlier.

In relation to 3Q09, EBITDA fell 7%, reflecting the compression in resin-feedstock margins in the international market, which were in average US$ 100/ton lower, and the Real appreciation between the periods.

In 9M10, EBITDA came to R$ 2,981 million, up 24% on the same period last year, driven by higher production volume and sales, in addition to better prices.

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BRASKEM S.A.

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