Braskem (BRKM5) Q4 2024 earnings summary

Executive summary

• Recurring EBITDA for 2024 reached US$1.1 billion, up 46% year-over-year, driven by higher international spreads, increased sales in Brazil and Mexico, and improved operational performance, despite a challenging 4Q24 with a 76% sequential drop in quarterly EBITDA to US$102 million.

• Net loss for 2024 was US$2.2 billion (R$12.1 billion), mainly due to negative exchange rate variation and increased provisions related to the Alagoas geological event.

• Cash position at year-end was US$2.4 billion, covering debt maturities for the next 47 months; gross debt stood at US$8.6 billion, with 92% in US dollars and an average term of 9 years.

• Safety performance improved, with a 16% reduction in the global accident frequency rate to 0.91 events per million hours worked, aligning with best market standards.

• Strategic initiatives included divestment of Cetrel, expansion of green ethylene capacity, and progress on the Alagoas salt cavity closure plan.

Financial highlights

• 4Q24 recurring EBITDA was US$102 million, down 76% sequentially and 52% year-over-year; annual recurring EBITDA rose 46% to US$1.1 billion.

• Net revenue for 2024 was R$77.4 billion, up 10% year-over-year; gross profit was R$5,997 million.

• Net loss in 2024 was R$11.3 billion, mainly due to R$11.5 billion in negative exchange rate variation.

• Operating cash generation for 2024 was R$4.1 billion, with recurring cash consumption of R$499 million due to higher interest payments and working capital variation.

• Leverage ratio ended 2024 at 7.42x, down 0.7x from the previous year.

Outlook and guidance

• All segments are expected to show higher utilization rates in Q1 2025 due to stable feedstock supply and absence of planned shutdowns; PE spreads in Brazil and Mexico projected to rise, while PP spreads in USA & Europe may decline.

• 2025 investments are planned at US$484 million, focusing on maintenance, operational efficiency, and completion of the ethane import terminal in Mexico.

• Management believes current working capital and capex financing are sufficient to fund operations and obligations for at least one year.

• The company will continue to evaluate the operational and financial impacts of Brazil's tax reform during 2025.

• Strategic focus remains on foundation, resilience, financial health, transformation, green business growth, and asset optimization.