Braskem S.A. Q1 FY2025 earnings call

• Consolidated recurring EBITDA was $224 million, 121% higher than Q4 2024, with net profit attributable to shareholders at $113 million.
• Cash position ended at $2 billion, sufficient to cover debt maturities over 33 months.
• Brazil segment had increased utilization rate, with Rio De Janeiro plant inventory management ahead of scheduled shutdown.
• Green Ethylene had operational improvements and two milestones in Renewables segment.
• United States and Europe segment had better performance with increased utilization and higher PP sales.
• Mexico segment had ethane supply increase and operational highlights with the inauguration of an ethane import terminal.
• Alagoas updates on relocation, compensation, salt cavity closure, and financial provisions.
• Strategic directions focus on resilience, financial health, and transformation, with initiatives like reducing CapEx, prioritizing projects, and supporting Brazilian chemical industry initiatives.

In the first quarter of 2025, Braskem's segments showed varied performances. The Brazil segment had an increased average utilization rate, with segment recurring EBITDA at $199 million, a 101% increase from the previous quarter. The Green Ethylene operations saw a 10 percentage point increase in utilization rate, though green polyethylene sales were impacted by Chinese New Year demand. The United States and Europe segment had a 13 percentage point increase in utilization rate, with PP volume sold 11% higher, and a segment recurring EBITDA of $20 million. The Mexico segment had a 2% increase in utilization rate due to increased ethane supply, but polyethylene sales were 5% lower, with a recurring EBITDA of $37 million, 6% higher than Q4 2024.

• Second quarter outlook is mixed, with Brazil plants anticipating maintenance shutdown, US and Europe segments stable with production balance, Mexico starting 45-day maintenance shutdown.
• International spreads challenging, but lower naphtha prices could positively impact Brazil resin spreads.
• Strategic initiatives aim for $5,000 million to $7,000 million value capture per year, with focus on optimizing naphtha-based assets, expanding gas-based assets, and expanding bio-product production to 1 million tons by 2030.

• Geopolitical and tariff uncertainties impacting spreads and feedstock costs.
• Inventory management challenges related to scheduled plant shutdowns.
• Financial impact from Alagoas event with significant provisions and disbursements.

Q: Gabriel Barra asked about tariff war impacts and $600 million value capture.

A: Rosana Avolio and Felipe Montoro Jens discussed tariff impacts on propylene spreads and feedstock, and details on CapEx, funding, and green portfolio expansion.

Q: Tasso Vasconcellos asked about CapEx, capacity closure, and government benefits.

A: Roberto Ramos discussed CapEx prioritization by materiality, capacity closure as last resort, and tariff agreement impacts.

Q: Unidentified Analyst asked about competitiveness and leverage.

A: Rosana Avolio, Felipe Jens, and Roberto Ramos discussed Brazil's position in global cost curves, leverage management, and competitiveness initiatives.

Q: Rodrigo Omeda asked about Brazil import tariffs, Mexico spreads, and import terminal.

A: Rosana Avolio and Roberto Ramos discussed import tariff impacts on market share, Mexico feedstock pricing, and terminal operations.

Q: Leonardo Marcondes asked about U.S. and Europe segment polypropylene dynamics.

A: Rosana Avolio and Roberto Ramos explained propylene dynamics, production capacity, and flexibility in the U.S. polypropylene segment