Braskem (BRKM5) Q2 2024 earnings summary

Executive summary

• Recurring EBITDA reached $320 million (US$320 million/R$1.7 billion) in Q2 2024, up 39–46% sequentially and 128–137% year-over-year, driven by improved international spreads and strong sales in Mexico and Brazil.

• Operational cash generation increased to $240 million (R$1.1 billion), with recurring cash generation at $69 million (R$357 million), reflecting disciplined capital allocation.

• Liquidity remained robust at $2.8 billion in cash, with an additional $1 billion credit line, covering debt maturities for the next 61 months.

• Leverage ratio improved to 6.79x, down from 8.13x in 1Q24, due to better results and cost discipline.

• Strategic progress included decarbonization initiatives, partnerships, and 75% completion of the Mexico ethane terminal.

Financial highlights

• Net revenue was R$19.1 billion, up 6% from 1Q24 and 7% from 2Q23; recurring EBITDA margin improved to 9% from 6% in 1Q24.

• Net debt stood at $5.6 billion, with a long average debt term of 12 years and 64% maturing after 2030.

• Net loss of R$3.7 billion in 2Q24, mainly due to R$4.5 billion negative exchange rate impact.

• Fitch and S&P maintained the company’s BB+ rating.

• Investments in 2Q24 totaled R$559 million, focused on maintenance, safety, and strategic projects.

Outlook and guidance

• Expectation for Q3 2024 is improved utilization rates in Brazil and green polyethylene as production resumes post-weather event.

• Anticipate higher sales volumes due to increased product availability and improved demand, especially in consumer goods and sanitation.

• US and Europe utilization rates to remain stable, with US benefiting from resumed production; Mexico production expected to rise with stable ethane supply.

• International spreads expected to remain supported by ongoing logistics restrictions.

• Ethane import terminal in Mexico expected to be operational in 1Q25, supporting full production capacity.