Brazil Braskem reports Q2 loss of $510m on weaker currency

14 August 2012 16:15  [Source: ICIS news]

Brazil Braskem reports Q2 loss of $510mHOUSTON (ICIS)--Brazil-based Braskem reported on Tuesday a second-quarter net loss of reais (R) 1.03bn ($510m, €413m), because sales did not keep up with costs and because its domestic currency weakened against the dollar.

During the same time last year, Braskem reported a second-quarter net income of R420m, the company said.

Much of the loss was caused by what Braskem calls its net financial result, which takes into account changes in the real versus the dollar.

During the second quarter, Braskem's net financial result recorded an expense of R2.11bn, compared with an expense of R79m for the same time last year.

Braskem attributed the larger expense to the dollar appreciating 11% against the real during the second quarter.

However, even without the weaker real, the second quarter was difficult for Braskem.

Second-quarter gross profit was R860m, down 30.1% from R1.23bn reported for the same time last year. Gross profit fell because costs outpaced sales.

Net revenue reached R9.14bn, up 9.2% from R8.37bn reported for the same time last year, Braskem said.

The company attributed the increase to higher prices for resins and basic petrochemicals, which helped offset lower sales volumes.

Second-quarter cost of goods sold reached R8.28bn, up 16.0% from R7.14bn for the same time last year. Braskem attributed the increase to higher costs for feedstock naphtha, the weaker real and the integration of Braskem's recently acquired polypropylene (PP) assets.

($1 = R2.02)
($1 = €0.81)


By: Al Greenwood
+1 713 525 2645



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