After delaying its earnings release twice, Braskem reported net loss of $708 million in the Q4 2019 on Friday. Due to postponed operations at chlor-alkali and ethylene dichloride plants in Alagoas, the provisions to cover financial compensation affected the company’s net loss.
With global demand for chemicals and thermoplastic resins below expectations, the company also said a pre-coronavirus down cycle in the petrochemical industry affected its operations in 2019.
Considering the reports exchange rate of Real 4.12/$1, Braskem made provisions of Real 3.4 billion ($825 million). However, the exchange rate on Friday was at Real 5.32/$1, resulting in a provision of $639 million.
While EBITDA dropped 49 percent to $254 million, net revenue was down 21 percent on the quarter, reaching $3 billion.
Braskem is working to acquire sea salt from third parties in Brazil or abroad to feed its chlor-alkali plant in Alagoas and eventually enable the company to restart that plant and a downstream ethylene dichloride facility that has been shut since May 2019.
Up 21 percentage points from 3Q 2019, Braskem's average polyvinyl chloride utilization rate in Q4 2019 was 78 percent. Braskem PP production in the US market was down 8 percent on year to 334,302 mt in the Q4, while sales were up 8 percent year on year at 355,615 mt but down 3 percent compared to Q3.
Braskem PE output in Mexico was 11 percent higher on year at 215,896 mt during the Q4, while PE sales were 5 percent up year on year and quarter on quarter at 206,693 mt. Its capacity utilization rate was 82 percent.
