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Braskem closes 2020 with recovery in operating results

In 2020, Braskem reported recurring operating result of R$ 11 billion, 86% higher than in 2019, mainly due to better spreads for resins in the international market driven by strong global demand, and the higher volume of resin sales in Brazil, in line with the company's strategy and goal of prioritizing supplies to the domestic market. Sales revenue reached R$ 58 billion, growing 12% from the previous year. In this scenario, corporate leverage declined significantly to end the year at 2.94x.

"Our core focus remains ensuring high safety standards and constant attention to the health of people in order to serve our clients. We are striving to overcome this difficult moment that the world is going through on account of the COVID-19 pandemic and remain firmly committed to our goal of addressing the challenges faced by Braskem, such as deleveraging the Company, so that we can once again become an investment-grade company", said Roberto Simões, CEO of Braskem.

In December, Braskem concluded an important phase relating to the geological event in Alagoas and its impacts by entering into agreements for compensation of residents and for socio-environmental reparations. After approval of the agreements by the competent authorities, the public-interest civil actions filed against Braskem relating to the compensation of residents and social and environmental reparations arising from the geological event in Alagoas were dismissed.

The Company recorded net loss of R$ 6.6 billion in the year, mainly due to the provisions related to the geological event in Alagoas in the amount of R$ 6.9 billion and by the impact of the exchange variation on the financial result given the Brazilian real's depreciation against the U.S. dollar on net exposure of US$ 3.4 billion.

In 2020, Braskem announced the expansion of its efforts to become a carbon neutral company by 2050 and to reduce by 15% its greenhouse gas emissions by 2030, besides expanding its portfolio to include 300 kton of thermoplastic resins and chemicals with recycled content by 2025, and which will reach 1 million tons by 2030. And to ensure that 1.5 million tons of plastic waste are disposed of properly over the next ten years.

In this regard, sales of recycled products reached almost 6 kton in 4Q20, an increase of 310% from the previous quarter. In the year, capacity utilization rate for green ethylene was 87%, increasing 9 percentage points from 2019, while Green PE sales reached 170 kton, increasing 5% from the previous year - both being the highest since the startup of the Company's biopolymers operation in 2010.

As for energy, Braskem strengthened its strategy of having an increasingly larger base of renewable sources. Last year, it announced important long-term renewable energy purchase agreements, such as the one with Canadian Solar Inc., one of the world's biggest solar power companies. This agreement entails the construction of a plant in northern Minas Gerais, with installed capacity of 152 MWp, enough to supply power to a city of 430,000 residents.  Also, Braskem signed an agreement with Voltalia to purchase solar energy, enabling it to expand the Serra do Mel solar complex in Rio Grande do Norte, which will have the capacity to supply power to a city of 1 million residents. In 2021, Braskem signed an agreement for the acquisition of wind energy from Casa dos Ventos, one of the pioneers and largest investors in the development of wind power projects in Brazil. 

An important highlight of 2020 was the renewal of naphtha, ethane and propane supply agreements in Brazil with Petrobras, for about 5 years, which will ensure the operational efficiency of the units in Brazil over the coming years.

Another highlight was the resumption of chlor-alkali and dichloroethane production at the unit located in the Pontal da Barra district in Maceió, which had been shut down since May 2019. To restart the chlor-alkali plant, Braskem concluded the project to produce brine as feedstock made from imported salt, which enables it to resume the production of PVC and caustic soda with an integrated model.

Click here to read the full earnings release.