Braskem reports recurring Operating Result in 2021 of US$5.6 billion, a record high and 171% higher than in 2020

Rhea-AI Summary

Braskem S.A. (BAK) reported a recurring Operating Result of US$5.6 billion for 2021, marking a 171% increase from 2020. In 4Q21, the result was US$1.1 billion, down 23% from 3Q21 due to lower chemical spreads and seasonal sales volume declines. Net Profit for 2021 reached R$14.0 billion. The company declared R$6.0 billion in dividends, equating to a 42.5% payout of Net Profit. Additionally, Fitch Ratings upgraded Braskem to BBB-, restoring its investment-grade status.

Positive

• Recurring Operating Result of US$5.6 billion for 2021, a record and 171% higher than 2020.
• Net Profit of R$14.0 billion in 2021.
• Declared R$6.0 billion in dividends, representing a 42.5% payout of Net Profit.
• Fitch Ratings upgraded the company's risk rating from BB+ to BBB-, reinstating investment-grade status.

Negative

• 4Q21 recurring Operating Result decreased by 23% from 3Q21 due to lower international spreads and seasonal effects.
• 4Q21 recurring Operating Result in Brazilian reais was R$6.3 billion, 18% lower than 3Q21.

In December 2021, the Company distributed R$6.0 billion in anticipated dividends based on the results for fiscal year 2021

In 2021, the free cash flow yield was of 24%

SÃO PAULO, March 17, 2022 /PRNewswire/ -- BRASKEM S.A. (B3: BRKM3, BRKM5 and BRKM6; NYSE: BAK; LATIBEX: XBRK) announces today its results for 4Q21 and 2021.

4Q21 and 2021 HIGHLIGHTS:

Braskem - Consolidated:

• In 4Q21, Braskem's recurring Operating Result was US$1.1 billion, 23% lower than in 3Q21, mainly due to: (i) lower international spreads for main chemicals, PE and PP in Brazil, PP in the United States and Europe and PE in Mexico, but above the historical average of the past ten years¹; and (ii) lower PP sales volume in Brazil, United States and Europe mainly explained by seasonality. Compared to 4Q20, recurring Operating Result in U.S. dollar increased 36%, due to: (i) better international spreads for main chemicals, PE and PVC in Brazil, PP in the United States and Europe and PE in Mexico; and (ii) higher sales volume of main chemicals and PVC in Brazil, PP in Europe and PE in Mexico. In Brazilian reais, recurring Operating Result was R$6.3 billion, 18% lower than in 3Q21 and 40% higher than in 4Q20, reflecting the Brazilian real depreciation against the U.S. dollar of 6.8% and 3.5%, respectively.
• In the quarter, Braskem reported Net Profit² of R$0.5 billion. In 2021, the Company reported Net Profit² of R$14.0 billion.
• In December, the payment of anticipated dividends was made by the Company, based on the results of the fiscal year 2021, in the total amount of R$6.0 billion, corresponding to the gross amounts of R$7.539048791898 per common share and class "A" preferred share and of R$0.606032140100 per class "B" preferred share, representing a payout of 42.5% of the Net Profit². Additionally, the Company's Management will be proposing the distribution of additional dividends in the amount of R$1.35 billion referring to the fiscal year of 2021, which will be deliberated for approval at the Annual Shareholders' Meeting to be held on April 19, 2022.
• The Company's free cash flow was R$3.1 billion, with return³ on cash flow in 4Q21 of 24%. In the year, the free cash flow generation was an annual record of R$10.7 billion.
• Corporate leverage, measured by the ratio of adjusted net debt to recurring Operating Result⁴ in U.S. dollar, ended 2021 at 0.94x.
• In December, the risk rating agency Fitch Ratings upgraded the Company's risk rating on the global scale from BB+ to BBB-, with a stable outlook. With the rating upgrade by Fitch, Braskem is once again considered investment grade.
• In December, the Company contracted, with a syndicate of 11 global banks, an international stand-by credit facility in the amount of US$1.0 billion, due in December 2026, that replaces the current facility.
• Braskem received correspondence sent jointly by its shareholders Novonor and Petrobras on the evolution of the discussions for the potential sale of their equity interests in the Company and signed on December 15, 2021 a Term Sheet formalizing the commitment of both parties to take the necessary measures to (i) sell the preferred shares held by Novonor and Petrobras in Braskem, through a secondary public offering(s) of shares (follow-on); (ii) enable the Company to migrate to the Novo Mercado segment of B3 SA - Brasil, Bolsa, Balcão ("B3"), including the promotion of the necessary adaptations to Braskem's governance, which must be approved at the appropriate time, and negotiation of a new Braskem Shareholders' Agreement in order to adapt its rights and obligations to Braskem's new governance structure; and (iii) once Braskem has effectively migrated to the Novo Mercado, perform the sale of the remaining common shares held by Novonor and Petrobras in Braskem.

ESG:

• In 2021, the overall accident frequency rate with and without lost time (CAF + SAF) was 0.86 event per million hours worked, 73,5% below the industry average, hitting the lowest rate in the last five years. Also, the Company achieved the best historical results in process safety with a Tier 1 + Tier 2 accident frequency rate of 0.32 event/million hours, 30% lower while compared to its 2020 metrics.
• In November, Braskem S.A., through its subsidiary Braskem Netherlands B.V., and Lummus Technology LLC, a worldwide leader in ethylene, petrochemical, energy transition and other process technologies, executed a memorandum of understanding to jointly license Braskem's green ethylene technology – from ethanol to ethylene - to two projects in different regions of the world: (i) a project under development in North America; and (ii) a project under evaluation in Thailand.
• In December, the first mechanical recycling line in Brazil came into operation, as a result of the partnership between Braskem and Valoren. The plant, located in Indaiatuba (São Paulo), has the capacity to transform around 250 million pieces of packaging into 14,000 tons of high-quality post-consumer resin per year.
• In December, Braskem announced the return to the Sustainability Index ("ISE") of the B3, reflecting the Company's continuous commitment to the best practices of corporate governance, social responsibility, economic-financial and environmental management.
• In December, Braskem was included in the ranking of leading companies in water management (A) and climate risks (A-) of the CDP (Carbon Disclosure Program) for the seventh consecutive time, achieving maximum classification in the "Water List" for the fifth consecutive time and remained the leading company on the "Climate List" for the seventh consecutive time, reinforcing its engagement and positive impact on the topic.
• In 2021, Braskem participated in 146 social projects, which benefited more than 800,000 people globally, including private social investments, donations, volunteer programs and initiatives to fight the pandemic. In 4Q21, the Company: (i) allocated R$3.2 million to the Saving Lives project, with BNDES matchfunding, to purchase oxygen plants and hospital equipment; (ii) donated R$1.1 million in hygiene and cleaning materials to the Government of the State of Bahia to support families affected by the heavy rains; and (iii) donated around R$660,000 to FIEB, which will revert the amount to basic food baskets, and another R$165,000 donated by Braskem Volunteers to CUFA "Abrace a Bahia".
• In January 2022, Braskem was one of the 23 companies in the industry included in the S&P Sustainability Yearbook for 2022, due to its good performance in the Corporate Sustainability Assessment (CSA) questionnaire in relation to the 234 peers evaluated.
• Braskem Europe has implemented a strategy of purchasing renewable energy for 100% of electricity consumption for its facilities between 2022 and 2024. With this strategy, it's projected a reduction of 80% in scope 2 greenhouse gas emissions during this period.

The full earnings release is available on the Company's IR website: www.braskem-ri.com.br/home-en

Braskem will host conference calls to discuss its Results THURSDAY, March 17 at 10:00 a.m. US ET.

Additional information may be obtained from the Investor Relations Department at +55 11 3576-9531 or braskem-ri@braskem.com.br.

¹ Considers the period from 2011 to 2020.
² Based on net profit (loss) attributable to the shareholders of the Company.
³ Considers the free cash flow generation of the last 12 months over the Company's market value in the quarter.
⁴ Excludes the Project Finance in Mexico and based on recurring Operating Result.

 

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SOURCE Braskem S.A.

FAQ

What were Braskem's financial results for 2021?

Braskem reported a recurring Operating Result of US$5.6 billion for 2021, a record high.

What is Braskem's stock symbol?

Braskem's stock symbol is BAK.

How much in dividends did Braskem declare for 2021?

Braskem declared R$6.0 billion in dividends for 2021.

What rating upgrade did Braskem receive from Fitch Ratings?

Fitch Ratings upgraded Braskem from BB+ to BBB-, restoring its investment-grade status.

What was the net profit for Braskem in 2021?

Braskem achieved a net profit of R$14.0 billion in 2021.