Braskem, the largest petrochemical company in the Americas, recorded high production and sales volumes, which supported record EBITDA in 2016. According to the unreviewed preview of results, the Company's consolidated EBITDA rose 23% on the prior year to R$11.5 billion (or US$3.3 billion, up 18% in USD terms).
The result is explained by the good operating performance of industrial units, current international resin spreads, increased export volume from Brazil, solid performance of operations in the United States and Europe, startup of the Mexico Petrochemical Complex, and average 5% depreciation in the Brazilian currency.
"Our 2016 results attested to Braskem's successful strategy," said Fernando Musa, CEO. "Braskem remained focused on delivering operating efficiency, consistent with its pursuit to diversify its feedstock profile and expand its operations internationally in the Americas."
Its focus on increasing the productivity and competitiveness of industrial units led to record-high average capacity utilization rate of the crackers in Brazil, at 92%, improving 3 percentage points from the previous year. In the year, production of thermoplastic resins was 4.9 million tons, up 4% from 2015, while basic petrochemicals production grew 3% to 8.5 million tons in the period.
Although the Company's domestic resins sales in 2016 declined 1% in Brazil to 3.4 million tons, Braskem was successful in implementing its strategy to shift part of its production to exports. Therefore, resin exports increased 24% in the year, totaling 1.7 million tons, also a new record. Sales of key basic petrochemicals increased 5% to 1.8 million tons.
In the United States and Europe, the average utilization rate of the seven polypropylene plants - five in the USA and two in Germany - was 100%, improving 2 percentage points from the prior year. Production came to a record-high 2 million tons, increasing 2%. Sales volume in those markets was also 2 million tons.
Aiming to meet client needs in the USA and Europe, earlier this year Braskem started the operations of a Ultra-High Molecular Weight Polyethylene plant in La Porte, Texas, following investments of US$40 million.
After the startup of Braskem Idesa in Mexico in April 2016, the average capacity utilization rate of the three polyethylene plants in the Petrochemical Complex of Nanchital increased to 73% in the fourth quarter of 2016, improving 10 percentage points from the previous quarter, within the expectations for the ramp-up period. In 2016, EBITDA of Braskem Idesa amounted to R$537 million (US$165 million), with EBITDA margin of 34%.
At the end of 2016, Braskem entered into a Global Settlement, under which it undertook to pay R$3.1 billion in financial penalty and compensation to authorities to settle the allegations in connection with Operation Car Wash. As a result, the Company's net income in the fourth quarter was adversely affected and the Company recorded a net loss of R$2.63 billion in the period. In the year, Braskem's net loss came to R$768 million, of which R$452 million related to the Parent Company.
Braskem plans to invest approximately R$1.8 billion in 2017, most of which in maintenance, productivity, HES and operating efficiency projects in Brazil, in addition to the investment program to use ethane as feedstock at the Camaçari Petrochemical Complex, in Bahia (R$ 236 million).
Braskem is the largest thermoplastic resin producer in the Americas, with annual production volume of over 20 million tons, which includes other chemicals and basic petrochemicals, and annual revenue of R$54 billion. Driven by its purpose of improving people's lives and creating sustainable solutions in chemicals and plastics, Braskem operates in more than 70 countries, has around 8,000 Team Members and operates 41 industrial units in Brazil, the United States, Germany and Mexico, the latter in partnership with the Mexican company Idesa.
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