1 / 11

Braskem 1Q13 Earnings Conference Call - Forward-looking Statements

This presentation contains forward-looking statements based on management's objectives and estimates. Braskem's thermoplastic resin sales increased in 1Q13, with market share expanding to 71%. EBITDA reached R$937 million. The construction progress and conditions precedents of the integrated project in Mexico are progressing well. The incentive to the Chemical Industry aims to support the industry's competitiveness and investment in new production capacity. Brazil's thermoplastic resins market and Braskem's market share are also highlighted.

wildman
Download Presentation

Braskem 1Q13 Earnings Conference Call - Forward-looking Statements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. 1Q13 Earnings Conference Call Investor Relations São Paulo, May 13, 2013

  2. Forward-looking Statements This presentation contains forward-looking statements. These statements are not historical facts and are based on management’s objectives and estimates. The words "anticipate", "believe", "expect", "estimate", "intend", "plan", "project", "aim" and similar words indicate forward-looking statements. Although we believe they are based on reasonable assumptions, these statements are based on the information currently available to management and are subject to a number of risks and uncertainties. The forward-looking statements in this presentation are valid only on the date they are made (March 31 2013) and the Company does not assume any obligation to update them in light of new information or future developments. Braskem is not responsible for any transaction or investment decision taken based on the information in this presentation.

  3. Highlights • Crackers utilization rates of 90% in 1Q13. • Braskem’s thermoplastic resin sales up 6% in comparison with the 4Q12, following the domestic demand trend and amounting to 921 kton. Market share expanded to 71% in 1Q13 vs. 70% in 4Q12. • EBITDA in 1Q13 reached R$ 937 million or US$ 470 million. Excluding nonrecurring items in 4Q12, EBITDA increased 10% in U.S. dollar. • Integrated project in Mexico: • Construction progress (26% of physical completion) and evolution in the conditions precedents (CPs) to the first disbursement of the project finance, which will occur in the second quarter; • Expansion in pre-marketing activities. • Incentive to the Chemical Industry: • In May, the federal government approved the measure that reduces the rate of PIS and COFINS taxes on the acquisition of raw materials (from 5.6% to 1%) and inputs for second generation (from 9.25% to 1%), maintaining the tax credit at 9.25%. • The incentives announced are aimed at supporting recovery in the competitiveness of the industry and strengthening investment in new production capacity, in order to meet the growing demand and reversing the sector’s trade deficit.

  4. Brazil’s thermoplastic resins market • Thermoplastic resins: 1Q13 x 1Q12 • Braskem Sales Profile - 1Q13 • Brazil’s thermoplastic resins market (in million tons) and Braskem Market Share 1Q12 2Q12 3Q12 4Q12 1Q13 Sources: Alice / Braskem

  5. EBITDA – 1Q13 versus 4Q12 R$ million • EBITDA recovery due to the higher sales volume, especially in the domestic market, and better spreads following the international market trend.

  6. Longer debt profile with diversified financing sources. Commitment to maintaining liquidity Diversified Funding Sources Banks 29% Bridge Loan 7% Net Debt / EBITDA (US$) Rating Braskem – Global Scale *Ex-bridge loan of Mexico Project = 3.34x in 1Q13

  7. Growth projects and Capex R$ million 70% • Maintaining its commitment to capital discipline, Braskem made R$ 297 million in operating investments in 1Q13: • ~90% of the total, or R$ 261 million, was allocated to maintenance and productivity improvement. • CAPEX Mexico: • The expected disbursement of US$ 619 million regarding the Bridge Loan shall occur until June/13. • The investments through equity are expected to begin in the second quarter.

  8. Braskem is well positioned to benefit from the North American gas Integrated Project with a production capacity of 1 million tons of PE – JV Braskem (75%) and Idesa (25%) • First disbursement shall occur until June/2013, after meeting some contractual obligations. • Construction in line with the schedule. Physical completion of 26%. • More than 6 thousand workers on site (direct and indirect). • Project Highlights • Competitive feedstock. North American gas as reference price. • Start-up of the complex in a period of high spreads in the petrochemical cycle. • Supply the net importer Mexican market. First project to start operations in the North American region

  9. Global outlook and petrochemical industry Ethylene: Additional Capacity (Million ton) Global outlook and petrochemical industry • Emerging countries should be the main driver of world economic growth • Expectation that demand growth is higher than supply  gradual recovery of spreads. • Brazilian Government committed to developing the chain and strengthening the competitiveness of local producers: • Extension of Reintegra Program; • Combating imports; • Reduction of payroll taxes for manufacturers; • Brasil Maior Plan (REIQ). 9.5 7.8 China 6.2 5.0 China 4.7 Ethylene Demand (Million ton) China China China U.S Iran Iran Iran • China: • Uncertainty regarding the feasibility of new projects • High costs/investments in order to access feedstock • Infrastructure problems (logistics, availability of water for extraction and etc) • Iran: • U.S. embargo affects products sale • USA: • Greenfield projects in U.S. are expected to come on stream as of 2016/2017 Source: IHS, Equity Research Reports

  10. Braskem's Priorities • Focus on continually strengthening the relationship with Clients and expanding market share. • Advance in the industrial policy for the petrochemical chain, focusing on tax reduction on investments, technological development and renewable chemicals. • Boosting Braskem’s competitiveness by the continuous improvement of its operational efficiency and diversification of its feedstock. • Ensure that the greenfield project in Mexico progress in line with its schedule and cost: start-up is expected in 2015. • Advancing on the engineering studies for the industrial units of the Comperj (FEL3) project and defining the feedstock to be used by the complex. • Maintaining liquidity and financial health in a scenario marked by global crisis.

  11. 1Q13 Earnings Conference Call Investor Relations São Paulo, May 13, 2013

More Related