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BAK NYSE· Braskem S.A.
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BAK NYSE· Braskem S.A.
Earnings report Q1 2024

BAK's Revenue Shows Mixed Performance Across Segments in Latest Quarter

Segments of Revenue

  • Brazil/South America: The average utilization rate of petrochemical crackers in Brazil decreased compared to the previous quarter and the same quarter of the previous year. This decline was primarily due to the scheduled maintenance shutdown at the Bahia Petrochemical Complex. Resin sales volume in the Brazilian market also decreased, mainly driven by the prioritization of sales with higher added value and the seasonality of the period. However, resin exports in the region increased, particularly in polyethylene (PE) and polypropylene (PP) opportunities in South America.
  • United States & Europe: The sales volume of polypropylene (PP) in the United States remained stable compared to the previous quarter and the same quarter of the previous year. However, the destocking process in the United States transformation chain impacted the segment's sales volumes.
  • Mexico: The average utilization rate of polyethylene (PE) plants in Mexico increased significantly compared to the previous quarter and the same quarter of the previous year. This improvement was mainly due to the production resumption after an unscheduled shutdown in the previous quarter and the higher availability of feedstock.

Strengths

  • BAK's recovery of production levels in Mexico was a positive highlight of the quarter, following the impact of an unscheduled shutdown in the previous quarter.
  • Resin exports in South America, particularly in PE and PP, experienced growth, indicating potential opportunities in the region.
  • The company's prioritization of sales with higher added value in the Brazilian market demonstrates a strategic focus on maximizing profitability.

Challenges

  • The average utilization rate of petrochemical crackers in Brazil declined due to the scheduled maintenance shutdown at the Bahia Petrochemical Complex, impacting the segment's revenue.
  • The destocking process in the United States transformation chain affected the sales volumes of the United States & Europe segment.
  • The lower availability of product for sale in the Brazilian market, resulting from the scheduled maintenance shutdown and the conclusion of the expansion project, led to a decrease in sales volume of Green PE.

Noteworthy

  • The recovery of production levels in Mexico and the increase in resin exports in South America were notable achievements for BAK in the latest quarter.
  • The destocking process in the United States transformation chain and the impact of seasonality on resin sales volume in Brazil were noteworthy challenges faced by the company.

Summary

BAK's revenue performance in the latest quarter showed mixed results across segments. While the company experienced challenges such as the scheduled maintenance shutdown in Brazil and the destocking process in the United States, it also achieved positive outcomes, including the recovery of production levels in Mexico and the increase in resin exports in South America. BAK's strategic focus on prioritizing sales with higher added value in the Brazilian market demonstrates its commitment to maximizing profitability. Overall, the company's revenue performance reflects a combination of strengths and challenges in different segments, highlighting the need for continued strategic management and adaptation to market conditions.

Source documents

Form 6-K  filed on Feb 20, 2024
2083 pages scanned

Reference data

Company financials Q1 revenue 16.68B
Analyst estimates Q1 EPS beat by 134.05%
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