Brazil Braskem swings to Q3 profit, earnings soar

07 November 2013 17:52  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Brazilian petrochemical giant Braskem reported a third-quarter net income of Brazilian reais (R) 394m ($173m, €128m), reversing a net loss of R124m in the prior-year period on improved operating performance, the company said on Thursday.

The company’s third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) reached R1.65bn, up by about 85% year on year from R892m. EBITDA for the year totalled R3.60bn, up by about 42% from R2.53bn.

Braskem attributed the increases in EBITDA to a recovery in thermoplastic resin and basic petrochemical spreads in the international market and a reduction in PIS (social integration) and COFINS (social contribution) tax rates on feedstock purchases that has boosted the sector’s competitiveness.

The company’s consolidated net revenue increased by about 16% to R10.70bn from R9.25bn, helped by a 13% dollar appreciation against the real, Braskem said.

In the domestic market, third quarter demand for thermoplastic resins fell by 8% to 1.3m tonnes due to a slowdown in industrial production. Braskem’s sales reached 898,000 tonnes, down 5%, with market share expanding by 2% to about 68%.

In the first nine months of the year, strong growth in the agribusiness, automotive and infrastructure sectors has pushed domestic resin demand to 4.0m tonnes, up by 9% year on year. Braskem’s sales in the period were up by 7% to 2.8m tonnes, the company said.

The company’s crackers operated at 92% of capacity during the third quarter, down slightly from the second quarter due to a power outage in Brazil’s northeastern states in late August that forced a number of unscheduled shutdowns in the region.

Brazil’s petrochemical industry posted a trade deficit of around $32bn in the twelve months ending 30 September, indicating the need for “a more comprehensive industrial policy that continues to strengthen the country’s industry and to attract new investments to the sector”, Braskem said.

($1 = €0.74, $1 = R2.28)

By: Simon West

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