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 petrochemical spreads and strong sales in Mexico and Brazil.

• Net loss was R$3.7 billion in Q2 2024 and R$5.3 billion for H1 2024, mainly due to negative exchange rate impacts and higher financial expenses.

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

• Strategic progress included decarbonization initiatives, expansion of partnerships, and 75–77% completion of the Mexico ethane import terminal.

• Significant remediation and social measures advanced in Alagoas, with over R$10.6 billion disbursed and R$15.9 billion provisioned.

Financial highlights

• Recurring EBITDA rose 39–46% sequentially and 128% year-over-year to US$320 million/R$1.7 billion.

• Operational cash generation was R$1.1 billion (US$214–240 million), up 9–15% sequentially.

• Net debt stood at US$5.6 billion, with leverage at 6.79x, improved from 8.13x in Q1 2024.

• Gross margin improved to 7.0% from 3.9% year-over-year.

• Cash and cash equivalents at period end were R$14,213 million.

Outlook and guidance

• Q3 2024 expected to see improved utilization rates in Brazil and green polyethylene as production resumes post-weather event.

• Anticipated sales volume increase in Q3 due to greater product availability and improved demand, especially in consumer goods and sanitation.

• Ethane import terminal in Mexico expected to be operational in Q1 2025, supporting full production capacity.

• Management expects continued volatility due to currency fluctuations and global macroeconomic uncertainty.

• Decarbonization initiatives in Alagoas and Rio Grande do Sul to reduce CO2 emissions by up to 200kt/year by 2026.