Braskem Q3 2026 Earnings Results & Report

Braskem EPS Results

• Actual EPS: -$0.5170
• Consensus EPS: $0.0214
• Beat/Miss: Missed by -$0.5384
• One Year Ago EPS: N/A
• EPS Beat Rate: 5 of last 8 quarters

Braskem Revenue Results

• Actual Revenue: $3.78 billion
• Expected Revenue: $3.64 billion
• Beat/Miss: Beat by +$137.24 million
• YoY Revenue Growth: N/A

Braskem (NYSE:BAK) is a Brazilian petrochemical company that produces thermoplastic resins and basic petrochemicals used in packaging, construction, automotive manufacturing, consumer goods and other industries. Its products include polyethylene, polypropylene and polyvinyl chloride, as well as chemical building blocks such as ethylene and propylene.

The company also makes bio-based plastics, including polyethylene produced from sugarcane-derived ethanol and marketed under its I'm green brand. These materials are designed to serve applications similar to those of conventional plastics.

Formed in 2002 through the combination of several Brazilian petrochemical businesses, Braskem has operations in Brazil, the United States, Mexico and Europe. Its products are sold to customers in markets around the world.

Braskem Q3 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Recurring EBITDA fell 63% quarter over quarter to $382 million, as petrochemical spreads normalized across all segments; higher selling and U.S. feedstock logistics costs also weighed on results.
• Negative Sentiment: Management expects the global petrochemical downturn to persist, with 2027 spreads in Brazil projected to remain below their 2016–2025 average amid global overcapacity and moderate demand.
• Positive Sentiment: Braskem Idesa’s utilization rate rose 19 percentage points to 62% as ethane supplies increased, lifting polyethylene sales 28%; however, the segment still recorded just $2 million in recurring EBITDA.
• Neutral Sentiment: The company generated $429 million in operating cash, including a $198 million working-capital benefit, largely from increased supplier credit and inventory optimization; after other effects and Alagoas-related disbursements, cash generation was about $269 million.
• Negative Sentiment: Braskem said discussions on a consensual capital-structure solution remain open and non-binding, with essential commercial terms still under discussion; management said it would take necessary measures if no agreement is reached.

Presentation

[Operator]

Good morning, everyone, and thank you for waiting. Welcome to Braskem’s third quarter of 2026 result conference call. With us today, we have Mr. Hélcio Tokeshi, Braskem CEO, Mr. Carlos Brandão, Braskem CFO, and Mrs. Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director. We inform you that this event is being recorded. The presentation will be held in Portuguese with simultaneous translation into English. All participants can choose which language to listen to see the presentation, using the show captions and view options buttons, respectively. After Braskem remarks, there will be a Q&A session. Please be advised that questions must be sent through the Q&A button. Now I will share the same information in English. The audio of this event will be available on the Investors Relations website after it ends.

[Operator]

We remind you that participants will be able to register questions for Braskem, which will be answered after the end of the conference by the IR department. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding Braskem business prospects, projections, operational and financial goals, constitute beliefs and assumptions of the company’s management, as well as information currently available to Braskem. Future considerations are not a guarantee of performance and involve risks, uncertainties, and assumptions, as they refer to future events, and therefore depends on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions, and other operational factors may affect Braskem future results and may lead to results that differ materially from those expressed in such conditions.

[Operator]

Now I will turn the conference over to Mrs. Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director. Mrs. Avolio, you may begin your presentation.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Good morning, ladies and gentlemen. Thank you all for participating in the Braskem earnings conference call for the third quarter of 2026. Today, we will present the operational and financial highlights of the period, the petrochemical scenario that impacted our business, as well as detail the performance of each segment, and share the market outlook for the next quarter and for 2027. Following the agenda on slide number 3, we will begin by presenting the context observed in the third quarter of 2026, starting with slide number 4. In the external scenario, after the atypical movement of the second quarter of 2026, we observed a normalization of the main petrochemical spreads throughout the third quarter.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Despite the 7.2% drop in the average price of Brent crude, which was $97 per barrel in the third quarter of 2026, oil remained at high levels. At the same time, projected global growth for 2026 remains at 2.5%, still below pre-war levels, reflecting economic impacts estimated at approximately $200 billion. From the geopolitical perspective, there was a partial normalization of oil flows through the Strait of Hormuz, contributing to a reduction in the pressures observed in the previous quarter. As a result, international spreads have returned to levels closer to the historical averages. Regarding polyethylene in Brazil, the U.S. polyethylene minus ARA naphtha spread fell by 57% compared to the second quarter of 2026, dropping from $773 to $334 per ton. For polypropylene, the Asia reference minus ARA naphtha spread fell by 16%, from $457 to $385 per ton.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

In the Mexican market, the U.S. polyethylene minus ethane spread fell by 35%, from $1,425 to $921 per ton. These movements primarily reflect a correction following the cyclical peak in the second quarter, with the arbitrage between polyethylene prices in the United States and Asia returning to levels closer to the historical average. Moving on to the next slide, the performance of each segment of the company will be presented with slide number six, starting with Brazil. The petrochemical complexes in Brazil segment presented an average utilization rate in line with that of the previous quarter, lower by one percentage point. This result is mainly explained by lower production at the petrochemical complexes in Bahia and São Paulo due to the strategy of expanding market share in priority markets while optimizing inventory.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

This effect was partially offset by higher production at the Rio Grande do Sul petrochemical complex, following the normalization of operations after scheduled maintenance carried out in the previous quarter. Regarding sales in the Brazilian market, the volume of resins was 12% higher than in previous quarter. This result is mainly explained by the execution of the commercial strategy focused on expanding market share in priority markets, as mentioned previously. Additionally, the volume of resin exports was 37% higher than in the second quarter of 2026, mainly due to the greater availability of products for export. Finally, the lower sales volume of chemicals is mainly explained by the prioritization of higher value-added sales. Now, regarding the quarterly results, the segment's recurring EBITDA was $267 million, 69% lower than in the previous quarter.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

This result was mainly impacted by lower contribution margin in the segment, which is explained by reduction in the average spread for resins by 42% and the average spread for key chemicals by 13%. Furthermore, higher selling expenses due to higher sales volume, a reduction in the recovery of credits related to vessel demurrage to approximately $7 million from $27 million in the previous quarter negatively impacted the result. These effects were partially offset by the higher sales volume, as mentioned earlier. Moving on to the next slide. In the third quarter of 2026, the green ethylene utilization rate was 19 percentage points lower, mainly explained by the scheduled maintenance shutdown of the Rio Grande do Sul plant, lasting 33 days, completed in October 2026. During the period, sales of green polyethylene were 19% lower due to reduced customer demand.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

In this quarter, it's worth highlighting that Braskem Renewable Ethylene unit completed 16 years, reinforcing the company's position as a global reference in biopolymers. With an annual production capacity of nearly 275,000 tons, the business has been making commercial progress, including a 9% compound annual growth rate in its recurring customer base since 2023, with particular strong performance in Europe. Furthermore, since the start of operations, more than 4.6 million tons of carbon have been removed. Other highlights include long-term partnerships within the I'm greenâ„¢ bio-based EVA portfolio with global brands such as New Balance and Decathlon. On the next slide, the United States and Europe segment recorded a 74% utilization rate for the quarter.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

The two percentage points reduction compared to the previous quarter is mainly explained by lower production in Europe due to the weather event that impacted the logistics chain, restricting the availability of polypropylene in the region. The PP sales volume was 2% lower, mainly due to the lower product availability for sale in Europe and in the U.S., higher customer inventory levels. This effect is explained by purchases brought forward to the previous quarter due to uncertainties related to the conflict in the Middle East. For the quarter, the recurring EBITDA for the U.S. and Europe segment was $15 million, a 90% decrease compared to the second quarter of 2026. The result is mainly explained by the lower contribution margin during the period due to the 14% reduction in the average PP spread in the U.S. and in Europe.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Additionally, higher one-off logistics expenses for the supply of feedstock in the U.S. contributed to the lower quarterly result. Moving on to the next slide. At Braskem Idesa, the utilization rate for the polyethylene plants was 62%, an increase of 19 percentage points compared to the previous quarter. This increase is mainly explained by the larger volume of imported ethane acquired and the larger volume of ethane supplied by Pemex. During the quarter, the average ethane import volume through the terminal was 27.3 thousand barrels per day, an increase of approximately 12.6 thousand barrels per day compared to the second quarter of 2026. Additionally, the supply of ethane by Pemex in the third quarter was 13.2 thousand barrels per day, an increase of nearly 1.4 thousand barrels per day when compared to the second quarter of 2026.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

In this scenario, polyethylene sales were 28% higher, driven by greater product availability for sale, resulting from increased production during the period, as previously mentioned. In this context, Braskem Idesa recurring EBITDA was $2 million, a decrease of $55 million compared to the second quarter of 2026. This result is explained by the segment's lower contribution margin due to a 35% reduction in the average polyethylene spread in the U.S. Moving on to the next slide. In the next chapter, I will present the company's consolidated results. Consolidated recurring EBITDA for the third quarter of 2026 was $382 million, 63% lower than in the previous quarter. This reduction is mainly explained by the lower contribution margin due to the normalization of petrochemical spreads in all reportable segments of the company.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Additionally, higher selling expenses associated with an increased sales volume and higher logistics expenses for the supply of feedstocks in the U.S. had a negative impact on the results. These effects were partially offset by the higher sales volume of resins in the Brazilian market and exports from the Brazil and South America segments, in addition to 28% increase in the sales volume of polyethylene at Braskem Idesa. Moving on to the next slide. In the third quarter of 2026, the company presented an operating cash generation of $429 million, mainly due to the positive variation in working capital of $198 million.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

This positive variation is mainly explained by the increase of approximately $309 million in the commercial credit limit for the acquisition of feedstock provided by Petrobras and by inventory optimization, with a positive impact of $92 million, resulting from a commercial strategy focused on expanding market share in priority segments. Considering the other effects and disbursement related to the geological event in Alagoas, the company generated approximately $269 million in cash during the period. The next slide. As of the end of September 2026, work fronts in Maceió continued to move forward as planned. The relocation and compensation work front ended the quarter with a 99.9% execution of the residents' relocation program. The same percentage applies to the number of proposals submitted under the Financial Compensation and Relocation Support Program, with approximately 99.7% of the proposals were accepted and 99% of the proposals were paid out.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

In parallel, we continue to move forward with the closure and monitoring of the salt cavities. On this work front, all actions, if necessary, that ensure that the 35 cavities reach a maintenance-free state in the long term have been provisioned. In the third quarter of 2026, out of the 18 non-pressurized cavities, 14 were completed, two were in the phase of confirming that the technical fill limit was reached, one was being filled, and one was in the preparation and planning phase. Furthermore, six cavities were naturally filled, and the 11 pressurized cavities are in the planning phase. Regarding the financial provision, the total amount provisioned for the event in Alagoas as of the end of September 2026 was approximately BRL 18.2 billion, of which nearly BRL 16 billion have already been disbursed, and approximately BRL 1.2 billion was reclassified to other payables.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

As a result, the total provision balance as of the end of the third quarter of 2026 was BRL 3.2 billion. Moving on to the next slide. On this next slide, I will talk about the outlook for the chemical and petrochemical scenario. Looking ahead, projections for consulting firms indicate a slight recovery in key spreads in the fourth quarter of 2026, but the environment remains challenging for the global petrochemical industry. For the Brazil segment, consultancies project a recovery of approximately 7% in the polyethylene spread and 21% in the polypropylene spread compared to the third quarter. In Mexico, a moderate recovery is also expected, with an increase of approximately 8% in the polyethylene ethane spreads. According to the consulting firms, the improvement in the fourth quarter of this year is mainly due to temporary supply restrictions caused by scheduled maintenance.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

For 2027, projections indicate that spreads for the Brazil segment are expected to remain at levels below the historical average between 2016 and 2025. According to consultancies, the global petrochemical industry is expected to remain in a down cycle, a reflection of global overcapacity, particularly in Asia, and a still moderate demand. Finally, I will talk about the company's priorities through the end of 2026. Braskem reviewed its targets and priorities for the second half of 2026 in response to recent changes in the company's environment and business activities. These changes are due to external and internal factors. In this context, I would like to highlight the new priorities for the second half of the year, presented through our pillars of action. In the restructuring pillar, we continue to focus on optimizing the capital structure of Braskem and Braskem Idesa.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Additionally, given the still challenging scenario for the global industry, the company will remain committed to disciplined capital allocation, focusing on preserving and optimizing financial liquidity. We are expanding our ambition to strengthen our business structural competitiveness under our operational and commercial pillar through the implementation of an operation excellence program, synergies, and the strengthening of commercial value capture levers. Furthermore, we remain committed to reinforcing our institutional engagement in promoting a more competitive business environment for the Brazilian chemical and petrochemical industry. Additionally, we will remain focused on completing the mapping of additional value creation opportunities and beginning to capture these benefits through the transformation plan. Finally, we will maintain our commitment to fulfilling the agreements related to the geological event in Alagoas and with regard to safety, which remains a non-negotiable value at the company.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

We remain dedicated to guaranteeing a reliable and safe operation, protecting people, and safeguarding the integrity of our processes across all regions where we operate. We've reached the end of the presentation of Braskem results for the third quarter of 2026. I would like to thank you all for your attention. Well, before proceeding, I would like to ask Mr. Carlos Brandão, CFO of Braskem. Mr. Carlos Brandão, the floor is yours.

[Carlos Brandão, CFO at Braskem]

Hello. Good morning, everyone. Before we proceed with the Q&A session, I'd like to provide an update for the market about the company's financial status. As we've been publishing over the past few months, we remain engaged with building a consensual capital structure solution. We've been working with specialized consultants and have been keeping a constant dialogue with all interested parties. After submitting the extrajudicial proceedings document earlier this year, the company has remained engaged with its employees and stakeholders in keeping everyone updated. We continue to see ongoing discussions in a non-binding manner, and we remain focused on understanding and reaching an agreement about the essential and primary commercial terms. It's important to highlight that these discussions remain open.

[Carlos Brandão, CFO at Braskem]

If we cannot reach a consensus within the established terms, the company's management will take all necessary measures to keep our stakeholders apprised of the situation and protect their interests, as well as continue our operations and our long-term strategy. Thank you all for your attention. We'll now proceed with the Q&A session.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Ladies and gentlemen, we will now start our Q&A session. We would like to inform you that questions should be submitted only through the Q&A button. Thank you very much, and thank you, Mr. Brandão. Just like we did in the previous earnings call, I have the questions we have been receiving through the chat, and as the questions, they converge somehow, I will answer them in block. Starting with Braskem Idesa, we have some questions about Braskem Idesa.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

It caught my attention, the rate of utilization rate of Braskem Idesa, even with the complexity of liquidity. How could you improve this, and which is the level of utilization rate of the plants nowadays? It is aligned with another question we received about the topic, and that we are happy to see the utilization rate moving upwards to 62%. Can you update us on the progress of the increase of utilization rate through October and November as well?

[Carlos Brandão, CFO at Braskem]

Thank you for the question. These are some effects of the ongoing restructuring progress for Braskem Idesa, which began a little bit before Braskem S.A. This is part of the resumption of our increase in utilization rate and financials. We continue involved in this operational agenda, which makes this company's short, medium, and long-term viability a reality. This is all based on ethane basis, which is the most competitive basis in our portfolio.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Thank you. Moving forward, we have a question. We have some questions, in fact, about Braskem Idesa. Ex-cash, Braskem Idesa was $1.1 billion, but the third quarter benefit from BRL 1.6 billion out of the commercial credit limit with suppliers, and BRL 109 million in interest paid, which is the recurring monthly cash use excluding these effects.

[Carlos Brandão, CFO at Braskem]

During this quarter, we generated EBITDA, positive EBITDA here at the company. This comes from a healthy operating result, and through our EBITDA, we were able to finance our investments. We also released working capital this quarter, which provided significant effects. We had a healthy quarter with positive cash generation, which we hope will be recurring over the coming quarters.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Thank you, Brandão. Let me take some questions on the petrochemical scenario. Given the still challenging factor for the petrochemical segment, how do you see the closing of capacity at Braskem nowadays? Which are the less competitive plants in Braskem nowadays? Thank you for the question. This is a variation we do recurrently. We have a recurring work that we call asset strategy. Recently, if you check the company's earning calls in the past few years, we have announced hibernations of some plants. We did this in the U.S. two or three years ago. Last year, we gave priority to having a PVC production that was more sustainable, and this made us change the business model for PVC. Today, we import EDC because we have optimized this PVC production, always looking for economic gains. This company has some strategies when we optimize the company's CapEx.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

You can see our CapEx results in the past few years. There's no doubt that we give priority within the company following some parameters, and we have some more structural discussions in the company, always looking at projections and the fundamentals of the industry. Right now, we are discussing our business plan that we take to the management, to the board, by the end of this year. This discussion is an ongoing discussion. As soon as we approve the company's business plan, we will put them into practice if applicable. We will put them into action. Moving on, there's a question on how you see the recent increase in ethane and propane in the U.S. How do you think Bakid spreads for the operations in the U.S. must react? You saw this movement in ethane.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

The price of ethane yesterday was $206 per ton, so there was an increase in these past few weeks or month, a month and a half, of nearly $20-$30 per ton, coming primarily due to that ethane logistics cost that has increased. Even so, ethane, not only now, but when we have long-term discussions, we are aligned with external consulting firms that ethane is the most competitive raw material and feedstock in the global petrochemical industry. Bakid, on its own, for having this cash cost with ethane, as well as the central in Rio de Janeiro and the flexibilization we have in Bahia today, we can capture these effects related to more of the ethane-based, more competitive ethane, even considering these factors. We'll look at the oil dynamics.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

The price of polyethylene globally will follow the cost of production of the marginal producer in the industry, who is a naphtha-based producer. Right now, if you take oil, $92 per barrel, yesterday's quotation, naphtha, $218 per ton, we have seen this being this cost in this cost of polyethylene. Ethane has gone up, as I mentioned, but due to this oil prices and naphtha prices, which are higher, we have seen the prices of resins also go up in the international market. Well, regarding a question, a more tactical question regarding, I mean, that we report per segment, and then we have the company's consolidated EBITDA. There were some questions about this topic. If you need more detail, the IR team is available for you. The results release has all of this information in detail.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

There are some exclusions because the company looks at our portfolio globally. We perform some eliminations, some exclusions, but it's all detailed in the release document, and the Investors Relations department is fully at your disposal for questions. Well, this last question, "Can Braskem compete on the global market, or will you focus exclusively on the domestic Brazilian market, trying to focus on the Brazilian chemical industry?" Thank you for the question. At the end of the day, the company strategy is a global strategy. We'll always leverage what we have in each region. For Mexico, the priority is to provide a product for the Mexican market. There's no doubt this was the project's rationale when we announced it back in 2010. Braskem has an important responsibility towards the Brazilian industry.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

In Brazil, we'll always give priorities to the Brazilian market, and naturally, the market in South America, even due to the agreements we have in this region. In the U.S., we'll always give priority to provide products to the U.S. market, because due to logistic costs, where if we supply within the region, these costs are lower, and then we can achieve a much higher profitability. The petrochemical market is a global market. When we create commercial opportunities in Europe, in Asia, in any other region, there's no doubt the company will take advantage of this, as we have done since the beginning of the creation of the company. You have a global regional production and sales strategy, and we do this monthly, and sometimes more frequently than monthly. That does conclude the Braskem video conference for today.

[Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director at Braskem]

Thank you all for your participation, and have a nice day.

Participants

Executives

• Rosana Avolio, Investors Relations, Strategic Planning, and Global Market Intelligence Director
• Carlos Brandão, CFO