The following is a summary of the Braskem S.A. (BAK) Q3 2024 Earnings Call Transcript:
Financial Performance:
Braskem reported a significant increase in Q3 2024 with recurring EBITDA reaching $432 million, which is 35% higher than the previous quarter and 130% higher year-over-year.
Operating cash generation was $75 million for the period. Recurring cash generation resulted in a consumption of $199 million mainly due to higher interest payments.
Braskem's corporate debt profile remained robust with an average maturity of about 11 years and over 65% of the debt maturing after 2030. Liquidity was reported at $2.4 billion, sufficient to cover debt maturities for the next 52 months.Corporate leverage improved to approximately 5.76 times, reflecting a decrease of 1.03 times from the previous quarter.
Business Progress:
Braskem's operational performance saw a recovery after the resumption of the Rio Grande do Su petrochemical plant post extreme weather event, significantly increasing the utilization rate of green ethylene in Brazil by 60 percentage points.
Sales volume in the Brazilian market increased by 6%, driven by heightened demand from the hygiene and cleaning sectors, as well as from civil construction and sanitation sectors.
Opportunities:
Usage of higher domestic feedstock in Mexico and growing polyethylene spreads in the international market contributed positively to Braskem's quarterly performance.
The ongoing strategic focus includes significant investments in growth avenues such as the newly inaugurated Center for Innovation in Renewables in the United States and advancements in the construction of an Ethane port terminal in Mexico.
Risks:
Scheduled downtimes in polyethylene and PVC plants in the upcoming quarters are likely to affect utilization rates especially in the Brazil segment, with expectations of a correlated decrease in sales volume due to typical seasonal demand reductions.
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