Braskem conference call_presentation_4_q08_results

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Braskem conference call_presentation_4_q08_results

  1. 1. 4Q08 EarningsConference Call
  2. 2. Forward-looking StatementsThis presentation contains forward-looking statements. These statements do notrepresent historical fact, but rather reflect the beliefs and expectations ofBraskem’s management. The words “anticipate”, “wish”, “expect”, “estimate”,“intend”, “forecast”, “plan”, “predict”, “project”, “target” and similar wordsare intended to identify these statements. Although Braskem believes that theexpectations and assumptions reflected in these forward-looking statements arereasonable and based on information currently available to management,Braskem cannot guarantee future results or events.The forward-looking statements in this presentation are valid only on the datethey are made (December 31, 2008) and the Company does not assume anyobligation to update them in light of new information or future developments.Braskem is not responsible for any transaction or investment decision takenbased on the information in this presentation. 2
  3. 3. 4Q08 Highlights• Unprecedent financial crisis• High volatility in the exchange rate, raw materials and resins pricesMarket: Drop-off in international thermoplastic resin demand Destocking in the petrochemical chain due to credit restriction Impact in Brazil concentrated in agriculture and durable goods in 4Q08 Brazils thermoplastic resin market contracted by 16% in 4Q08Operating Performance: Reduction in the plants capacity utilization rates starting in November Net revenue of R$ 4.1 billion in 4Q08, 18% lower than in 3Q08 EBITDA of R$ 633 million with an EBITDA margin of 15.4%, positively impacted bythe effects from the adjustments introduced by law 11,638/07 in the amount of R$74 million, not related to the period 3
  4. 4. 4Q08 HighlightsReal Depreciation: R$1.9 billion accounting impact on net liabilities pegged to the US dollar Increase in the producers competitiveness Reduction of resin imports in DecemberStrategic Actions: Approval for the construction of the green PE plant and obtainment of theenvironmental license to build the facility. Agreement with Toyota Tsusho to sellGreen PE in Asia. Focusing on the cash position 4
  5. 5. Destocking trend in the petrochemical chainlimits growth in domestic market to 3% in 2008Domestic Sales 2008 x 2007 % Resin Market Share 2008 + 7% +7% Others 26% +3% +2% 51%* - 3% 23% Imports Braskem Brazilian PP PVC PE Resins Market* * Braskem market share includes sales of *Domestic Sale + Imports PVC imported by the CompanySource: Braskem / Abiquim 5
  6. 6. EBITDALower resins prices and reduced volumes overcomethe positive FX impact on revenues FX impact R$ million 1,487 on revenue 426 9 FX impact (949) on costs 538 683 (848) 633 (174) 3Q08 Exchange Raw Fixed Costs/ Price Volume 4Q08 Rate Materials OthersSource: Braskem 6
  7. 7. Financial Results reflect FX variation R$ million 4Q08 3Q08 4Q07 2008 2007 Financial Result (2,275) (1,616) (137) (3,685) (367) Expenses (2,731) (1,923) 329 (4,403) 211 Income 456 308 (466) 719 (578) FX Variation (1,872) (1,351) 146 (2,629) 798 Loss (2,290) (1,618) 675 (3,173) 1,607 Gain 418 267 (528) 544 (809) FX Rate - EOP 2.34 1.91 1.77 2.34 1.77 FX Variation 22.1% 20.3% -3.7% 31.9% -17.2%Source: Braskem 7
  8. 8. Short-term debt well managed and long- term debt well distributed with an average term of 11 years R$ million (12/31/08) Gross Debt: 11,986 Net Debt / Ebitda (x) R$ Net Debt / Ebitda (x) US$ Net Debt: 9,028 Average Term: 10.9 years 3.73 3.06 3.42 2.89 74% of the debt are pegged to the USD 9% - 6% Cash and Equivalents 2,960 Sep08 Dec08 Sep08 Dec08 18% 738 13% 1,901 12% 11% 11% 11% 10% 1,408 8% 6% 1,642 1,368 1,259 1,402 1,345 1,059 942 1,169 713 12/31/08 2009 2010 2011 2012 2013 2014 / 2016 / 2018 / 2020 onwards 2015 2017 2019 In R$ In US$ Value related to the loan granted by a Petrobras subsidiary for the delisting of Copesul, due in October 2009Source: Braskem 8
  9. 9. Net debt increases by US$500 million on investments of US$1.3 billion US$ million 175 355 337 3,864 3,350 1,297 (1,325) 2,230 (271) (54) Working PPSA Net Debt Interest Dividends Ebitda FX / MV Net Debt Investments Net Debt Capital Consolidation Dec07 Dec08 disbursements Dec08Source: Braskem 9
  10. 10. Focus on priority investment projects R$ million 2,279 Investments in Equity Stake 885 (Ipiranga Group/Politeno) Capacity increases / 909 195 Petroquímica Paulínia 238 Equipment Replacement Capacity increases / Green PE 172 161 HSE 213 Equipment Replacement 91 Technology Productivity HSE 202 203 Technology 14 Maintenance 74 Productivity 407 182 Maintenance 55 Information System Information System 45 Quality / Others 14 37 Quality / Others 2008 2009Source: Braskem 10
  11. 11. Short-term priorities Focus on financial strength and liquidity Acceleration of the capture of synergies from the IPQ/CPS acquisition Focus on maintaining operational profitability Recovery of plants capacity utilization rates Naphtha: conclusion of the new contract with Petrobras Green PE Project: construction in progress Assessment of growth opportunities during the crisis Greater operational and financial strength 11
  12. 12. 4Q08 EarningsConference Call

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