Braskem has reported strong recurring operating result in the second quarter of 2021, fueled by growth in both net sales revenue and net income. As such, the Company continues to reduce its gross debt and corporate leverage, which reached its lowest level at the end of the quarter. 

• Recurring operating result in the quarter came to R$9.4 billion, up 35% from the previous quarter and 522% year on year;
• Net sales revenue reached R$26.4 billion, increasing 16% from 1Q21 and 136% from 2Q20;
• Net income was R$7.4 billion, increasing 198% from the previous quarter;
• The ratio of net debt/recurring operating result in USD was 1.1x in the quarter, down 39% from the previous quarter (1.8x), and 85% from the same period last year.

"Braskem's results in the quarter reflect the positive scenario in the international petrochemical market and our commitment to financial health as we firmly maintain our goal of regaining our investment-grade rating. We are working hard to continue contributing to the economic recovery and to serve our clients and partners well, while always prioritizing the safety and health of our team members," said Roberto Simões, CEO of Braskem.

The Company's recurring operating result was driven by improved international spreads and higher sales volume of polypropylene in the U.S. and polyethylene in Mexico. In Brazil, Braskem registered a 7% quarter-on-quarter decline in demand for resins in the second quarter, which was mainly due to the normalization of demand in a few segments such as construction, packaging and consumer goods, among others. Nevertheless, demand remained at healthy levels, growing 34% in 2Q21 compared to 2Q20, when the economy contracted on account of the COVID-19 pandemic.

To reduce its gross debt, Braskem carried out a series of operations totaling US$643 million in the second quarter. Moreover, in July the Company fully redeemed the bonds maturing in 2022, in the amount of US$255 million, and prepaid a bank loan of US$100 million.

As a result, in May, Fitch Ratings revised the outlook for Braskem's rating to positive and assigned it the BB+ rating on a global scale. In July, Moody's revised Braskem's rating outlook to stable, assigning it the Ba1 rating on a global scale. 

ESG

In line with the UN Sustainable Development Goals for 2030, Braskem undertook fresh commitments on seven fronts: health and safety, economic and financial results, elimination of plastic waste, combating climate change, operational eco-efficiency, social responsibility and human rights, and sustainable innovation.

An important milestone in reporting the Company's efforts in this regard was the publication of its 2020 Integrated Report according to the standards of the Global Report Initiative (GRI), the International Integrated Reporting Council (IIRC) and, for the first time, the Sustainability Accounting Standards Board (SASB).  Learn more at  www.braskem.com.br/portal/Principal/arquivos/relatorio-anual/Braskem_RI2020_PT.pdf

Another important milestone was the approval, at the Extraordinary Shareholders Meeting held in July, of the amendment and restatement of the Bylaws of the Company to transform the Compliance Committee into the Statutory Compliance and Audit Committee. The creation of this Committee follows a recommendation in the Brazilian Corporate Governance Code and established in Instruction 480/09 of the Securities and Exchange Commission of Brazil (CVM). The committee will consist of independent members, two of them external and nominated from a list selected by a headhunter.

Continuing its support actions to combat COVID-19 and the social impacts of the pandemic, this year Braskem donated R$15 million to projects that included the distribution of over 55,000 food baskets and 25,000 hygiene kits. Braskem's volunteer program also joined these efforts and to further boost its impact, the Company multiplied fivefold the donations made by its team members, in the form of food baskets.

Since 2018, Braskem has been assisting the government in understanding the geological phenomenon in Maceió and minimizing its effects. The Company signed agreements with the Federal Prosecution Office, the State Prosecution Office, the Federal Public Defender's Office and the Alagoas State Public Defender's Office to ensure the safety of, and provide financial compensation to, the residents of the neighborhoods affected by the phenomenon, and to carry out social, environmental and urban reparation in the region. 

To cover the compensation for residents, the social, environmental and urban reparation and the safe closure of salt wells in the region, Braskem had provisioned R$10.2 billion, whose current balance stands at R$7.7 billion.

Braskem has been honoring the schedule agreed with the authorities of Alagoas. Of the properties located in the map of priority actions drawn up by the Civil Defense authorities of Alagoas, 13,807 units, or almost 96%, have already been vacated.

By July, 8,298 proposals had been submitted under the Financial Compensation and Support for Relocation Program to residents, merchants and businessmen in the evacuation area, with the acceptance rate being 99.7%. The Program has so far paid over R$1.1 billion as indemnities and financial aid.