Braskem(US:BAK)2023-05-09 19:46Financial Data and Key Metrics Changes - In Q1 2023, Braskem reported recurring EBITDA of $205 million and net profit of $184 million, with cash consumption of $261 million [4][5] - The company maintained solid credit metrics with a long debt profile and strong liquidity, covering debt maturities for the next six years [4][13] - Corporate leverage was reported at 3.86 times, reflecting lower EBITDA compared to the same quarter of the previous year [13] Business Line Data and Key Metrics Changes - In Brazil, the petrochemical crackers operated at an average utilization rate of 77%, a 5 percentage point increase from the previous quarter, with a 3% increase in domestic sales volume and a 10% increase in exports [7] - The United States and Europe segment had a capacity utilization rate of 81%, a 6 percentage point increase, with a sales volume of 518 tons [10][11] - In Mexico, the utilization rate was 72%, a 3 percentage point increase, with an 11% increase in sales volume [12] Market Data and Key Metrics Changes - The global accident frequency rate decreased by 8% compared to the same period in 2022, indicating improved safety performance [5] - The company experienced better performance in global industrial activity, leading to increased sales volume across all segments [6] Company Strategy and Development Direction - Braskem is focusing on expanding its green ethylene capacity by 30% and has made progress in the construction of an ethane terminal in Mexico [5] - The company is committed to maximizing cash generation and optimizing asset operations while pursuing initiatives related to sustainability and innovation [14][16][21] - The strategic focus includes investments to combat climate change and eliminate plastic waste, alongside enhancing innovation and digital transformation [21] Management's Comments on Operating Environment and Future Outlook - Management noted that the pace of international demand growth is uncertain, but they will continue to seek strategies to maximize synergies across regions [72] - The company expects stable production levels in Brazil and increased sales volume in the U.S. and Mexico for Q2 2023 [20] Other Important Information - Braskem has made significant provisions related to the geological event in Alagoas, totaling BRL 13.2 billion, with BRL 7.5 billion already disbursed [8] - The company has invested in expanding its technology and innovation centers, with a focus on sustainable development [16][17] Q&A Session Summary Question: Potential sale of Braskem and minority shareholder rights - Management confirmed that in the event of a sale, minority shareholders would have tag-along rights for 100% of shares [24][25][28] Question: Working capital dynamics and petrochemical prices - Management indicated that working capital utilization is expected to remain positive, with a focus on monitoring oil prices and product prices [29][30] Question: Conversations with rating agencies - Management emphasized the importance of maintaining close relationships with rating agencies and noted that leverage expectations align with agency requirements [34][35] Question: M&A risks and potential synergies with ADNOC - Management acknowledged potential synergies with ADNOC but emphasized the need for further analysis of any proposed transactions [38][39] Question: Changes in leadership and company strategy - Management reiterated that the company remains committed to its growth strategy, focusing on bio products and circular economy initiatives [44][45] Question: Impact of arbitration and covenant risks - Management stated that the arbitration process is confidential and confirmed that there are no covenants for corporate debts [48][49]