Braskem Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Consolidated Recurring EBITDA: USD 192 million, up 76% from Q4 2025.

Operating Cash Flow: Operating cash consumption of approximately USD 603 million; total cash consumption including Alagoas disbursements was about BRL 5.0 billion.

Cash Position: Ended Q1 2026 with USD 1.1 billion in cash, factoring in a USD 1 billion standby facility maturing in December 2026.

Debt Metrics: Adjusted net debt (excluding Braskem Idesa) was USD 8.5 billion, with a corporate leverage ratio of 16.81x.

2Strategic Updates and Business Highlights

Utilization Rates: Brazil segment utilization increased by 10 percentage points; U.S. and Europe segment by 8 percentage points; Mexico segment decreased by 30 percentage points due to feedstock supply issues.

Safety Performance: Achieved a global accident frequency rate of 0.18 events per million hours worked, the best in a decade for Q1.

Sustainability Initiatives: Braskem returned to the Corporate Sustainability Index (ISE B3) and announced plans to receive the Celo Verde Brasil certification for its green polyethylene products.

3Forward Guidance and Outlook

Market Conditions: Anticipated improvement in petrochemical spreads throughout Q2 2026 due to geopolitical disruptions; however, normalization expected in Q3 2026.

EBITDA Potential: Potential EBITDA for Q2 could approach high cycle levels, with estimates around USD 800 per ton for spreads, reminiscent of 2017 levels.

Operational Strategy: Focus on maintaining liquidity, managing working capital, and optimizing production rates in response to market conditions.

4Bad News, Challenges, or Points of Concern

Mexico Segment Struggles: Significant decline in utilization and sales volumes due to feedstock supply issues, resulting in negative recurring EBITDA of USD 15 million.

Cash Flow Challenges: Operating cash consumption and working capital management remain critical, with concerns over inventory levels and payment terms affecting liquidity.

Geopolitical Risks: Ongoing conflict in the Middle East poses risks to feedstock availability and pricing, with uncertainty around the duration and resolution of the conflict impacting market dynamics.

5Notable Q&A Insights

Indebtedness Management: CFO Felipe Jens discussed the company's approach to managing debt levels, indicating a target leverage of around 4.5x during low cycles and 2.5x during high cycles.

Liquidity Strategies: The company is exploring various avenues to enhance liquidity, including negotiating with suppliers and monetizing non-liquid assets.

Demand Dynamics: Analysts raised concerns about how geopolitical events could alter demand patterns, particularly with expectations of reduced demand as the conflict potentially resolves.

Operational Capacity: CEO Roberto Ramos emphasized the need for increased access to working capital to raise utilization rates, indicating that current operational levels are below potential due to resource constraints. Overall, while Braskem showed strong financial recovery in Q1 2026, challenges related to geopolitical risks, operational inefficiencies in Mexico, and cash flow management remain critical areas of focus for the company moving forward.