São Paulo – Braskem, the Brazilian petrochemical company, increased its exports by 55% last year, according to results announced this Wednesday (14th). Export revenues stood at US$ 6.5 billion, equivalent to 33% of the company’s net revenues. Braskem informed that among other factors, the performance was due to an increase in prices of some products, such as butadiene, whose cost rose by 50%.
The company’s consolidated gross revenues stood at 39.8 billion Brazilian reals (US$ 22 billion) in 2011, a 15% increase over the preceding year, and net revenues reached 33.2 billion reals (US$ 18.4 billion), a 19% increase. Braskem explains that the growth was influenced by an increase in average international prices of petrochemicals, which made up for the lower sales volume stemming from scheduled shutdowns, rather than maintenance breaks. There were shutdowns at units in Northeast Brazil as a result of power outages in the region.
The EBITDA, i.e. earnings before interest, taxes, depreciation and amortization stood at 3.7 billion reals (US$ 2 billion), a decline of 8% compared with the preceding period. “The decline is explained through the compression of industry margins in the second half, the 5% average appreciation of the real during the period, and the lower sales volume,” Braskem claims in its reports. As a consequence, the net result was a loss of 517 million reals (US$ 297 million).
The company explains that its teams remained focused on “maintaining operational excellence and minimizing the impacts of the global economic downturn brought about by the worsening of the European debt crisis in the second half, just as the markets gave signs of recovery, thus restricting international demand for petrochemicals and affecting the industry’s profitability.”
According to Braskem, these world economy challenges, alongside the appreciation of the real in the first half and incentives granted by some ports to imported products – in addition to scheduled shutdowns at its units – had a negative effect on its operational performance. By late December, the company had a net debt of US$ 6.3 billion, 8% higher than in late 2010.
In 2012, according to Braskem, the scenario is one of caution, as there is pressure on petrochemical industry spreads, despite the improved prices. “A gradual increase in demand is expected, resulting in recovery of the spreads from the second quarter onwards,” the company explains in its report, referring to the different between product cost and sale price. The company claims that in the medium and long term, the outlook for the petrochemical industry remains positive.
*Translated by Gabriel Pomerancblum
