08 August 2013 20:53 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--Brazilian petrochemical giant Braskem posted on Thursday a Q2 consolidated net loss of Brazilian reais (R) 128m ($56m, €40m), narrower than the R1.03bn loss registered in the prior-year quarter.
Braskem attributed the loss itself to a net financial expense – which takes into account exchange rate changes in the real versus the dollar – of R666m. The company noted a 10% appreciation of the US dollar against the real during the April-June period.
According to the company, 100% of its revenue is directly or indirectly linked to the dollar and around 80% of costs linked to the same currency.
At the beginning of the second quarter, Braskem opted to designate part of its dollar-denominated liabilities as a hedge for future exports in efforts to better reflect the exchange variation on the company’s result.
If hedge accounting had not been adopted, Braskem would have posted a net loss of R1.08bn in the second quarter, the company said.
Braskem’s consolidated net revenues increased over the quarter by 6% year on year to R9.5bn amid higher sales volumes of resins and basic petrochemicals.
The company’s domestic thermoplastic resin sales increased by 19% to 947,000 tonnes, accounting for 66% of total market share – a slight decrease from the prior-year quarter, Braskem said.
Q2 earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 24% year on year to R1.05bn thanks to a rise in sales volume growth and a recovery in international resins spreads, the company said.
The company’s crackers operated at 94% of capacity during the quarter, a 4% increase over the prior-year period, amid improved operating efficiency, Braskem said.
The increase was also attributed to a reduction in the PIS (social integration) and COFINS (social contribution) tax rates for raw material purchases, a measure approved by the Brazilian government in May to boost the competitiveness of domestic chemical producers, Braskem said.
Also on Thursday, Braskem gave an update on construction of the Mexican Ethylene XXI petrochemical project, a joint venture between the Brazilian company and ?xml:namespace>
According to the company, the project was 37.7% complete by the end of the quarter, and is currently focused on mechanical assembly, manufacture of piping and initial installation of equipment.
Operations are expected to begin in the second half of 2015 and will include a 1.05m tonne/year ethane cracker, two high density polyethylene (HDPE) plants with capacities of 350,000 tonnes/year and 400,000 tonnes/year, and one 300,000 tonne/year low density polyethylene (LDPE) plant.
The company announced on Monday that Braskem Idesa – the joint venture firm building the project – had received the first $1.5bn of a total estimated outlay of $3.2bn. The project is being financed by a number of Brazilian, Mexican and international banks.
($1 = €0.75, $1 = R2.28)
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