Braskem announces a net profit of R$ 122 million in the first quarter of 2006, a period characterized by a steady recovery of the domestic thermoplastic resins market in relation with the last months of 2005. This result reflects the satisfactory operational performance of the company and inverts the situation of the last quarter of 2005 when a R$ 5 million loss was registered.

In the first three months of this year, the increase of Naphtha prices, main raw material utilized by the company, and of other derivates of petrol used to produce energy, represented an additional impact of approximately R$ 130 million in the costs of Braskem if compared to the first quarter of 2005. In order to lessen these effects, Braskem kept the focus on the active management of prices and volume aiming at maximizing the profitability of its operations and create value for all the shareholders.

The average index of capacity utilization reached 87% in the first quarter, registering a slight draw back in comparison with the indexes observed in 2005. The thermoplastic resins sales in the domestic market increased 1%. They weren"t higher due to the adjustments in the participation on the polyethylene market resultant from the beginning of the operations of Rio Polymeros - about this resin in particular, the internal sales of Braskem decreased 14%. The total volume of thermoplastic resins commercialized reached 404 thousand tons. The exportations totalized US$ 242 million, a number 7% lower than the one registered in the same period of 2005.

"Braskem is considering all the decisions necessary to lessen the effects of this
challenging scenario, such as the reduction of the general and administrative expenses and of the financial costs, besides accelerating its programs of productivity increase and improvement of competitiveness, like Braskem + and Formula Braskem", says José Carlos Grubisich, president of the company. "Furthermore, the increase of the demand for thermoplastic resins in the domestic market in the last quarter and the recovery of their prices in the international market that started some weeks ago, indicate a more positive scenario for the next quarters", he adds.

In the first quarter of this year, the net income of Braskem in dollars, currency of
reference for prices in the petrochemical sector, reached US$ 1,2 billion, 4% higher than the amount registered in the same period of last year. In reais (Brazilian currency) the income of the quarter suffered a 14% reduction, totalizing R$ 2,6 billion, due to the trajectory changing of currency exchange and to the decrease of sales volume. In the accumulated of the last 12 months, the net income rose 15% in American currency, increasing from US$ 4,2 billion to US$ 4,8 billion, and a fall of 7% in reais, reaching R$ 11,2 billion.

The EBITDA of Braskem in this first quarter reached US$ 183 million, compared to the amount of US$ 258 million observed in the same period in 2005, showing a scenario of a 25% more expensive Naphta in dollars. When expressed in reais (Brazilian currency), the EBITDA passed from R$ 688 million to R$ 400 million, reflecting the impact of an appreciation of 18% in the exchange rate. In the accumulated of the last 12 months, the EBITDA had a reduction of 18% in dollar, reaching US$ 776 million in the end of March, 2005, equivalent to R$ 1,8 billion.

The net debt of the company reached US$ 1,6 billion in the end of March, compared to RS 1,5 billion in the closing of 2005. The level of financial push, measured by the net debt index/EBITDA, decreased from 1,63 to 1,97 in this period, considering the new criteria fixed by the Commission of Movable Values. The average term for the debt, that was nine years in the end of the first quarter, passed to 16 years with the new emission of perpetual bonds that happened in the beginning of April, in the value of US$ 200 million, considering a competitive percentage of 9% per year.

"Braskem keeps its strategy of a continuous reduction of its capital cost and also
reaffirms the company"s commitment to a financial discipline", states Paul Altit, vice president of Investors Relations and Finances.

In the end of March, Braskem and Petroquisa decided for not taking the option that allowed this shareholder increase the participation from 10% to 30% in the voting capital of the company, due to the lack of agreement with the terms and conditions supposed to create value for all Braskem shareholders.

Braskem advanced expressively in its entrepreneurial strategy of growth and of
consolidation of the sector when acquired, in the beginning of April, the control of Politeno, detaining 100% of its voting capital and 96,15% of the total capital. The initiative plays an important impact in the amplification of the technologies and products portfolio of Braskem, besides it makes possible the gaining of US$ 110 million in synergies in present net value.

Still in April, Braskem announced the signature of an agreement with Pequiven for the implementation, in Venezuela, of the most competitive petrochemical project of Americas, the Complex Olefins of Jose, for the production of more than 1,2 million/tons of ethane, from natural gas, besides polyethylene and other second generation products.

"Braskem reassures its confidence in the development of the Brazilian economy and the petrochemical market and based upon this, the company is accelerating the implementation of its strategy of growth and internationalization", says Grubisich. In order to prove this confidence, Braskem decided to implement from today on, a 180 days program of reacquisition of its preferential shares class A and ordinary that aims at capturing an important potential for value creation, due to the current discount given to the shares of the company.