ENP Newswire - 11 August 2014
Release date- 08082014 - Sao Paulo - Braskem registered domestic sales of 879 kton of resins in the second quarter of 2014, down 7% on the year-ago period and accompanying the 8% decline in the Brazilian market.
The lower demand for resins in the local market reflects the slowdown in the Brazilian economy in the quarter, as well as the fewer business days in June this year. Compared to the first quarter of 2014, Braskem's sales contracted by 2.6%. The Company's net revenue amounted to R$10.9 billion, decreasing 8%, impacted by the average Brazilian real appreciation of 6% in the quarter.
Polypropylene sales by Braskem units in the United States and Europe amounted to 479 kton, increasing 4% and 3%, respectively, on the year-ago period. In addition to this growth in production, the positive results were also influenced by the better performance of the U.S. automotive and retail industries.
In the second quarter, production at Braskem was affected by the scheduled maintenance shutdown on one of the lines of the raw materials center at the Triunfo petrochemical complex in Rio Grande do Sul and by the ongoing feedstock supply problems at the Duque de Caxias unit in Rio de Janeiro. As a result, the average capacity utilization rate of Braskem's crackers fell by one percentage point to 84% in the period. A scheduled maintenance shutdown on one of the lines of the Maua cracker in Sao Paulo is scheduled for the second half of September.
In the second quarter, Braskem reported EBITDA of R$1.1 billion, which represents a decline of 17% from the first quarter on a recurring basis. The Company posted net profit of R$124 million in the second quarter, down 69% on the prior quarter, a period that was benefitted by the divestment of the Water Treatment Unit at the Triunfo complex.
SUPPORT FOR THE CHAIN AND GROWTH PROJECTS
In line with its commitment to promote Brazil's plastics chain, Braskem continued to achieve advances in the Plan to Promote Competitiveness in the Plastics Chain (PIC) that was created in 2013. To better introduce to the agricultural industry the latest innovations in plastics, such as silo bags and plastic truck bodies, the Company and its Clients participated in Agrishow in Ribeirao Preto, which is one of the largest agribusiness trade fairs in Brazil.
During the quarter, Braskem announced a project to produce ultra-high molecular weight polyethylene at its unit in La Porte, Texas. Known by its commercial name UTEC, the resin developed using 100% Brazilian technology will complement the existing production line at the Camacari complex in the state of Bahia. The new plant is slated to start operations by mid-2016.
In the first six months of the year, Braskem's investments amounted to R$1.3 billion. Part of the Company's strategy to expand and diversify through competitive feedstocks, the project in Mexico reached 75% completion. Currently the largest ongoing investment in Mexico, the project concluded assembly of the larger pieces of equipment, such as the ethylene tower. The complex, whose feedstock supply agreement is based on the U.S. natural gas price reference, will start operations in 2015.
Braskem continues to analyze, together with a group of investors, the feasibility of the Ascent project, which is an integrated complex for the production of polyethylene from shale gas in the United States.
'Braskem remains firm in its strategy to cut costs and diversify its feedstock profile, continued to strengthen relations with its Clients, supported the development of the country's petrochemical and plastics chain, captured operating efficiency gains and maintained its financial health,' said Carlos Fadigas, Braskem's CEO.
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