Braskem, the largest petrochemical producer in the Americas and the world's leading biopolymers producer, closed 2018 with record-high cash flow of R$7.1 billion, which is 187% higher than in the previous year. The result was supported by the positive variation in operating working capital, the depreciation in the Brazilian real against the U.S. dollar, the lower tax expenses abroad and the lower interest expenses.
Net sales revenue also grew in the period, by 18% on the prior-year period, from R$49.3 billion in 2017 to R$58 billion in 2018. Braskem's EBITDA fell 8%, from R$12.3 billion to R$11.3 billion in 2018. The company posted net income of R$2.87 billion in the year, down 30% on the net income reported in 2017, of R$4.1 billion. The Company's Management is proposing to the Annual Shareholders' Meeting to be held on April 16th, 2019 the distribution of dividends in the amount of R$ 2.670 million for fiscal year 2018, equivalent to 100% of the net income attributable to shareholders.
"We demonstrated solidity and resilience and delivered consistent results in a year marked by narrowing international spreads in our industry and in which we had to deal with various non-recurring events that adversely affected our operations around the world: the truck drivers' strike in Brazil, the severe winter in the United States, the instability in feedstock supply in certain markets caused, for example, by the low level of the Rhine River in Europe and the incident at the chlor-alkali plant in Alagoas," explained Fernando Musa, Braskem CEO. "We are ready to surmount the challenges of the world economy," he added.
The operating and commercial highlights of 2018 include the higher resin demand (polyethylene, polypropylene and PVC) in Brazil of 5.2 million tons, up 2.4% from 2017, which is explained by stronger economic growth spurred by demand from the agrochemical, cosmetics, pharmaceutical and food packaging industries. In this scenario, the highlight was the PVC market, which grew 1.4% after four straight years of contraction.
Braskem's crackers in Brazil operated at a capacity utilization rate of 91% in 2018, down 3 p.p. from 2017, mainly due to the truck drivers' strike and the plant outages in the Northeast at the start of the year. In this scenario, resin sales came to 3.4 million tons, down 2% from 2017, while sales of key chemicals increased 1% to 2.9 million tons. In 2018, resin exports were 1.3 million tons and exports of key chemicals were 571,000 tons, down 14% and 31% from 2017, respectively. In the year, the units in Brazil and exports posted EBITDA of US$1.96 billion (R$6.98 billion), which represents 61% of the Company's consolidated EBITDA from all segments.
In the United States, PP demand grew 3.1% compared to 2017, with the highlight the caps and oriented films segments, which are widely used in food packaging. In the European market, PP demand decreased compared to 2017, accompanying the region's weak economic performance, especially in countries such as Germany and Italy. Braskem's plants in the United States and Europe operated at a capacity utilization rate of 87%, down 11 p.p. from 2017, mainly due to the plant outages in the United States, the scheduled shutdown of the unit in Oyster Creek, Texas for 50 days and the inbound logistics constraints on propylene supply to the plants in Europe explained by low river levels. Polypropylene sales decreased 9% compared to 2017, to 1.9 million tons. In the year, the units in the United States and Europe posted EBITDA of US$608 million (R$2.208 billion), representing 19% of the Company's consolidated EBITDA.
In Mexico, the polyethylene (PE) plants operated at an average capacity utilization rate of 77%, down 11 p.p. from 2017, due to the lower supply of ethane in the period and the scheduled shutdown conducted in May. As a result, PE sales decreased 18% from 2017, to 799,000 tons, 67% of which was sold in Mexico's domestic market. In the year, the Mexico unit posted EBITDA of US$617 million (R$2.251 billion), representing 20% of the Company's consolidated EBITDA.
The year 2018 was marked by progress on various initiatives under the strategy to diversify the feedstock profile and to expand internationally. In Brazil, we completed the first year of operating the cracker in Bahia state using imported ethane as feedstock. In the United States, US$382 million was invested out of a planned total of US$675 million in building a new polypropylene plant, which is the sixth PP plant in the United States and whose construction already is around half completed.
Furthermore, Braskem's Board of Directors approved the incorporation of a new company in India to capture new growth and sales opportunities.
Braskem also kicked off its digital transformation process. The process is guided by a roadmap with over 50 initiatives in areas such as Industrial Operations, Marketing, Sales, Supply Chain and Corporate. Braskem has been adopting technologies such as artificial intelligence, machine learning and advanced analytics to develop digital tools for process optimization, preventive maintenance, quality control, blockchain applications in logistics processes, supply and demand forecasting, product tracking and various other processes.
The advancement of these initiatives is essential for enabling Braskem to remain at the forefront in innovation in the global petrochemical industry and to position itself to cut costs and capture competitive advantages, which often are the result of new technologies.
In January 2019, Braskem, along with 30 other global corporations, joined the Alliance for the End of Plastic Waste, a non-profit organization that plans to invest up to US$1.5 billion over five years in projects, developing new technologies and other solutions to end the disposal of plastic waste in the environment, especially in marine environments. "The move demonstrates our commitment to a better world in which plastic can offer society all of its benefits while also being properly disposed of after use," said Musa.
Braskem also garnered important accolades in people management. The Company was recognized by Out & Equal Workplace Advocates, the world's largest organization promoting LGBT+ rights in the workplace, for its efforts to foster diversity and the inclusion of LGBTQIA+ people in corporate environments. It was elected one of the most loved companies by team members in a survey conducted by Love Mondays, the digital platform of Glassdoor, in which employees evaluated the companies where they work. And it figured among the best Companies to Launch a Career, according to a survey by the magazine Você S/A.