Braskem Q2 Earnings Call Highlights
Key Points
- Interested in Braskem S.A.? Here are five stocks we like better.
- Recurring EBITDA reached $1.043 billion in Q2 2026, with a 24% margin, helped by wider petrochemical spreads and $150 million in Brazilian PIS/COFINS tax credits. Operating cash flow was $385 million, though post-disbursement cash consumption was approximately $15 million.
- Braskem cautioned that the improved spreads were driven by a temporary Middle East-related supply shock, not a structural recovery; consultants expect spreads to normalize in the second half amid global oversupply and moderate demand.
- Management is pursuing a consensual financial restructuring with major creditors while focusing on cost discipline, operational efficiency and cash generation. Mexican operations were reduced to preserve liquidity, while full-year capital expenditures excluding IDESA are expected at $485 million.
Braskem (NYSE:BAK) reported recurring EBITDA of $1.043 billion for the second quarter of 2026, supported by wider international petrochemical spreads following supply disruptions linked to the Middle East conflict. The company said the improvement was tactical rather than evidence of a structural recovery in the global petrochemical cycle, which it expects to remain pressured by overcapacity and moderate demand.
Recurring EBITDA margin reached 24% in the quarter. Braskem said results benefited from higher average spreads for resins and chemicals across its operating regions, as well as $150 million, or BRL 578 million, in PIS/COFINS tax credits related to feedstock purchases under Brazil’s REIQ inputs program.
The company generated $385 million in operating cash flow and approximately $210 million in recurring cash generation during the quarter. After Alagoas-related disbursements and lease-purchase agreement payments, Braskem reported cash consumption of roughly $15 million.
Market Conditions Boosted Spreads
Rosana Avolio, Braskem’s investor relations, strategic planning and global market intelligence director, said the Middle East conflict restricted global feedstock supply, particularly to Asia, lifting oil and naphtha prices. Higher costs for marginal Asian producers helped raise international resin and chemical prices compared with the first quarter.
In the U.S. polyethylene market, the spread was nearly 40% above the 2016-2025 average, aided by a temporary widening in the arbitrage between the U.S. and Asia. Braskem said U.S. ethane-based producers also benefited because ethane prices did not rise in line with other petrochemical feedstocks.
However, Avolio cautioned that the stronger spreads reflected an “on-off supply shock” rather than a structural shift in industry fundamentals. External consultants expect spreads to normalize in the second half as trade flows adjust, while global oversupply—particularly in Asia—and moderate demand continue to weigh on operating rates.
- Consultants expect Brazilian PE-naphtha spreads to decline 59% between the second and third quarters as U.S.-Asia arbitrage narrows.
- Brazilian PP-naphtha and Mexican PE-ethane spreads are also expected to decline.
- Braskem said geopolitical, logistics and operational disruptions could still create intermittent upside opportunities.
Brazil Results Led Quarterly Improvement
The Brazil segment posted recurring EBITDA of $869 million, up 261% from the prior quarter. The company attributed the increase primarily to an approximately 50% rise in international spreads for resins and major chemicals, along with $115 million in PIS/COFINS credits and nearly $27 million from recovered vessel-demurrage credits and reversed accounting provisions.
Those gains were partially offset by a 4% appreciation in the average Brazilian real against the dollar and lower domestic sales volumes. Brazilian resin sales declined 2% sequentially, reflecting a 6% decline in polyethylene volume and a 1% decrease in PVC volume amid higher imports. Polypropylene sales increased 3%, in line with domestic demand growth.
Chemicals sales volume declined 4%, which Braskem attributed to lower availability of gasoline and benzene for sale as well as weaker demand for ethylene and styrene. Average utilization at Brazilian petrochemical plants was one percentage point higher than in the first quarter as the company maintained production amid volatile feedstock prices.
Green polyethylene sales increased 49% from the first quarter, supported by opportunities in Europe and normalized demand after the seasonal Chinese New Year effect. Braskem also renewed a commercial partnership with New Balance to use its I’m green bio-based EVA in running-shoe soles.
U.S., Europe and Mexico Operations
The U.S. and Europe segment reported recurring EBITDA of $147 million, rising from the previous quarter due mainly to higher international polypropylene spreads. Utilization was 76%, down three percentage points because of scheduled maintenance shutdowns lasting 35 days at a U.S. plant and 30 days at a German plant.
Higher sales volumes in the U.S. were offset by lower European volume, where inventory management in the processing chain affected sales. Total segment sales volume was therefore in line with the first quarter.
In Mexico, Braskem IDESA operated its polyethylene plants at 43% capacity, down 12 percentage points sequentially as the company adopted liquidity-preservation measures. Average ethane imports through the terminal fell to 14,700 barrels per day, while Pemex supply declined to 11,800 barrels per day.
Mexican polyethylene sales fell 11% because of lower product availability. Still, the segment’s recurring EBITDA improved to $57 million, aided by a 73% increase in the U.S. polyethylene spread.
Restructuring and Second-Half Priorities
Chief Financial Officer Carlos Brandão said Braskem is discussing a consensual financial restructuring with major creditor groups, including banks and bondholders. He said the company’s objective is to rebalance its capital structure for the long term.
Chief Executive Officer Hélcio Tokeshi said the company is pursuing two complementary priorities: building a sustainable capital structure and strengthening competitiveness through a transformation program centered on operational excellence, cost discipline, synergies and cash generation.
Braskem said it does not foresee changes in Brazilian operating rates due to the liquidity measures at Braskem IDESA, stating that it will continue seeking market opportunities while prioritizing Brazilian customers. Management also said it expects full-year capital expenditures, excluding IDESA, of $485 million; 35% had been spent through the first half, which it described as in line with the prior year’s spending pattern.
In Alagoas, Braskem said its residence relocation program was 99.9% complete at the end of June. Total provisions for the geological event stood at approximately BRL 18.2 billion, including BRL 14.6 billion previously disbursed and nearly BRL 1.2 billion reclassified to other payables. The remaining provision balance was BRL 3.2 billion.
About Braskem (NYSE:BAK)
Braskem (NYSE:BAK) is a leading integrated petrochemical company based in São Paulo, Brazil, and holds the distinction of being the largest thermoplastic resins producer in Latin America. The company operates across the entire value chain, from feedstock sourcing and polymer production to distribution and recycling. Braskem's comprehensive approach to petrochemical manufacturing enables it to serve a diverse set of end markets with a broad portfolio of products.
Braskem's core product lines include polypropylene, polyethylene and polyvinyl chloride (PVC), which are used in industries such as packaging, automotive, construction and electrical electronics.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
Source MarketBeat
Braskem Pfd ADR Stock
With 3 Buy predictions and 2 Sell predictions the community is currently undecided on Braskem Pfd ADR.
Based on the current price of 1.85 € the target price of 4 € shows a potential of 116.22% for Braskem Pfd ADR which would more than double the current price.
