OREANDA-NEWS. The capacity utilization rate of Braskem's petrochemical complexes reached 94% in the second quarter, maintaining the recovery observed in the previous quarter, when the average capacity utilization rate stood at 90%. This is the highest rate since the third quarter of 2009. This performance reflects the gains in operating efficiency in the period and also benefitted from the stimulus measures adopted by the government, which published a provisional presidential decree that has not yet been approved by Congress that reduces the tax rate on raw material purchases for first and second generation chemical producers in Brazil as of May 8, 2013, with the aim of making them more competitive.

With the improvement in operating efficiency, the Company's EBITDA reached BRL 1.1 billion in the second quarter, growing 12% from the first quarter, driven by the higher sales volume, better margins for thermoplastic resins in export markets and positive impact of the tax cuts.
 
According to Braskem CEO Carlos Fadigas, "the results achieved in the second quarter reflect the commitment of our internal teams to improve the operations or our complexes, combined with external factors, such as the growth of the underlying market and the expansion in international resin spreads. However, these signs of recovery are still timid compared to the cost challenges faced by our industry in the country, especially considering the competitive advantage provided by shale gas to U.S. petrochemical producers, which is why it is essential that the provisional presidential decree reducing taxes on raw material purchases be approved by congress as soon as possible," he noted.
 
Braskem's consolidated net revenue amounted to BRL 9.5 billion in the second quarter, increasing 6% from the second quarter of 2012, driven by the higher sales of resins and basic petrochemicals, the increase in international resin prices and the average appreciation in the U.S. dollar against the Brazilian real.
 
Braskem's consolidated net debt decreased 5% in the second quarter to USD 6.9 billion on June 30, 2013. The Company's financial leverage, measured by the ratio of net debt to EBITDA in the last 12 months, stood at 3 times after excluding the Mexico project, representing a reduction of 10% from the prior quarter.
 
Note that at the end of July, the subsidiary Braskem-Idesa withdrew the first installment of the project finance in the amount of USD 1.5 billion, which enabled it to repay the injections advanced by shareholders, which in the case of Braskem amounted to USD 649 million.
 
Since part of its production is regularly exported and aiming to better reflect exchange variation in its profit or loss, Braskem decided to designate, as of May 1, part of its dollar-denominated liabilities as a hedge for its future exports. In this context, the Company posted a net loss of BRL  128 million in the second quarter. In the first half of the year, Braskem recorded net income of BRL 99 million.
 
In line with its commitment to making investments with returns above its cost of capital, Braskem invested just over BRL 1.0 billion in the first half of 2013. Of this amount, 47% (BRL 493 million) was allocated to the Mexico project, due to the resumption of investments via equity and the anticipation of certain disbursements related to the progress on the complex's construction. The Company also invested BRL 486 million in maintenance in order to keep its assets operating at high levels of operating efficiency and reliability. For the whole of 2013, Braskem's investments are estimated at BRL 2.2 billion.
 
"In the near term, we will remain focused on creating a more favorable business environment for the petrochemical and plastic industries in Brazil through approval of the tax cuts on raw materials and programs to develop the plastics chain," said Fadigas. "At the same time, we will continue to work on growth projects with access to competitive raw materials by advancing construction on the Mexico project, ensuring the feasibility of Comperj and evaluating opportunities in the United States," he added.