The Brazilian petrochemical market gave clear signs of growth in the second semester compared to the first, with a positive performance in production, sales and margins, reflecting a recovery in demand in segments that began to grow again during the period. With the increase in sales volume in the domestic market, the recovery of international prices for basic petrochemicals and the growth in exports, Braskem achieved an EBITDA of R$ 566 million for the quarter, which represents a 24% increase over the previous quarter. Translated into dollars, the currency of reference for the petrochemical sector, EBITDA grew 38%, reaching US$ 273 million. Margin over net revenues reached 15.3%, 1.3 percent greater than the first quarter.

Recovery in the demand for thermoplastic resins in the Brazilian market reached 18% when comparing the two quarters of the year. An even more significant variation took place with Braskem’s domestic sales of resins. They grew 27% in the second quarter, where it is necessary to underscore the 55% increase on PVC, followed by the plus 29% for polypropylene. Basic petrochemical sales in the domestic market recorded an increase of 47% pursuant to greater demand by clients and better prices. This performance enabled Braskem to maintain its capacity utilization rates above 90% for the period during which 2 production records were broken, reflecting the effects of investments made in operational reliability and technological modernization.
 
According to Bernardo Gradin, Braskem president, "the Company operated at full capacity during the second semester of 2009 in response to growing domestic demand and the gradual recovery of the international market. The robustness of Brazilian consumption, driven by durable goods, foods and civil construction, points to a third quarter with positive growth. Basic petrochemicals, especially aromatics, saw a recovery in margin due to supply restrictions in Asia. The growth announced by China and other developing countries feeds expectations of price recoveries in resins and petrochemicals, supposing that new supplies of petrochemicals from the Middle East and China will be compensated by hibernation and the closing of factories in Europe and the USA. Nevertheless, this down cycle should last until mid 2011.

In the foreign market, resin sales broke their second consecutive record with a volume of 271 thousand tons in Q209, accompanied by a recovery in basic petrochemical prices and volumes, such as benzene and butadiene. North American sales stand out with 8% growth over the previous quarter, returning to historical levels. The combination of these factors led a 57% growth in revenues from exports compared to the first quarter, for a total of US$ 542 million, which represents 31% of net revenues.

Braskem’s net revenues reached US$ 1.8 billion in Q209, 26% more than the revenues recorded in the first quarter. In reais, net revenues were R$ 3.7 billion, a growth of 13%.

In Q209, Braskem recorded new profits of R$ 1.15 billion, which represented an increase of R$ 1.14 billion compared to R$ 10 million in profits in Q109. Besides the improved operational performance in the quarter, the 16% depreciation of the dollar to the real had a positive impact on net financial results.

The company closed Q209 with a cash balance and investments exceeding R$ 3.2 billion, with an 8% increase over the sum recorded last March 31, providing greater strategic flexibility and the capacity to continue contributing towards the chain’s financing. Exchange rate variations contributed towards the 20% reduction in net debt for the period, totaling R$ 7.3 billion, with an average maturity of 10.1 years. The net debt/EBITDA ratio also fell. This ratio translates the level of financial leverage, which went from 3.97 to 3.16 times.

In line with its commitment to capital discipline and the making of investments with returns greater than their capital cost, Braskem set aside R$ 163 million for its growth, modernization and technological upgrade programs in the second quarter, totaling R$ 286 million in investments made during the first semester. It is worth underscoring the installation of the Green PE project in Triunfo, RS, which continues according to the defined timetable, with operations projected to begin in October 2010.

As the final stage of the Investment Agreement between Braskem and its shareholders, Odebrecht and Petrobras, Braskem incorporated Petroquímica Triunfo in May, concluding another step in the process of strengthening and increasing competitiveness in the Brazilian petrochemical sector through corporate consolidations. Team integration is at an advanced phase and physical asset integration is practically finished, with the addition of 160 thousand t/year of polyethylene to the company’s production capacity. Braskem already projects expanding the plant’s capacity by 12 thousand t/year by the end of 2010.
 
"Braskem is still committed to giving priority to customer satisfaction, the productivity of the petrochemical value chain, financial health of its balance sheet and growing and sustainable profitability. Through the strengthening of its leadership in Latin America, Braskem seeks growth opportunities that broaden the opportunities for increasing profitability in attractive markets," adds Gradin.