Braskem(US:BAK)2024-03-19 22:28Financial Data and Key Metrics Changes - Braskem's recurring EBITDA was $211 million in Q4 2023, totaling $743 million for the year, reflecting a significant decrease compared to 2022 due to lower petrochemical spreads [5][16] - The company recorded a loss of approximately $935 million in 2023, with a recurring cash consumption of $375 million, excluding payments related to Alagoas [6][16] - Braskem ended the year with $3.6 billion in cash, sufficient to cover debt maturities over the next seven years, and maintained a long debt profile with an average maturity of 12 years [6][18] - The company's leverage ratio was 8.12 times, a reduction of approximately 4 times compared to the previous quarter [6][18] Business Line Data and Key Metrics Changes - In Brazil, the utilization rate of petrochemical plants in Q4 was 66%, with a 2 percentage point decrease from the previous quarter, and resin sales volume was 11% lower than the previous quarter [12] - The U.S. and Europe segment had a utilization rate of 82% in Q4, with a 6% decrease in sales volume compared to Q3, but recurring EBITDA increased by 45% to $87 million [14][15] - In Mexico, the utilization rate increased by 18 percentage points to 84% in Q4, with recurring EBITDA reaching $26 million, nearly three times higher than Q3 [15][12] Market Data and Key Metrics Changes - The global accident frequency rate decreased by 2% compared to the previous quarter, ending the year at 1.08 events per million hours worked, below the industry average [8] - The company experienced a significant impact from the imbalance between global supply and demand, leading to historic lows in international spreads throughout the year [5] Company Strategy and Development Direction - Braskem is focusing on balancing capital allocation to advance its growth agenda, with significant investments in industrial decarbonization and technology [9][10] - The company aims to enhance its green ethylene production capacity and has made strides in recycling initiatives, including acquisitions and joint ventures [10][11] - The strategic focus for 2024 includes optimizing the asset portfolio, reducing costs, and increasing productivity while maintaining a commitment to safety [28][31] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the Brazilian segment in 2024, anticipating increased utilization rates and sales volumes [25][26] - The company expects a stabilization trend in spreads and improved cash generation, with a focus on higher value-added sales [26][29] - Management emphasized the importance of maintaining liquidity and cost discipline while continuing to implement measures to reduce corporate leverage [18][31] Other Important Information - Braskem's total provisions related to the Alagoas event reached BRL15.5 billion, with BRL9.5 billion already paid [24] - The company has committed to fulfilling its obligations under the agreement signed in Maceio, focusing on social, urban, and environmental actions [25][31] Q&A Session Summary Question: Details on ongoing due diligence processes - Management confirmed that Petrobras's due diligence is nearly complete, with two other players also conducting due diligence, but timing is uncertain [34][36] Question: Update on Alagoas provisions and Senate discussions - An additional provision of BRL1 billion was made, primarily due to operational downtimes and changes in well categories [34][37] Question: Outlook on spreads and recovery - Management indicated that spreads are expected to improve in 2024, transitioning towards normalization by 2025 [35][41] Question: CapEx and portfolio optimization for 2024 - CapEx for 2024 is projected at $400 million, significantly lower than 2023, with no major new projects planned [44][45] Question: Sustainability of PEMEX supply and market share in Brazil - PEMEX has maintained stable ethane production, and Braskem has seen opportunities to regain market share due to logistics disruptions [52][53]