Braskem SA Class A's Earnings Call: Ethane Contract Delays, Transform Rio Timeline Discrepancies Don't Match

Date of Call: Mar 27, 2026

Business Commentary:

Petrochemical Industry Challenges:

• Braskem's recurring consolidated EBITDA for 2025 was $557 million, a 49% decrease compared to the previous year.
• The decline was due to prolonged down cycle in the petrochemical industry, with international petrochemical spreads below historical averages, impacting profitability and liquidity.

Brazil Segment Performance:

• The Brazil Segment reported recurring EBITDA of $698 million for 2025, which is 22% lower than in 2024.
• This decrease was primarily due to lower resin and chemical sales volumes and lower average spreads, although partially offset by cost reduction initiatives and Brazilian real depreciation.

Utilization Rates and Production Adjustments:

• Utilization rates at petrochemical complexes in Brazil for 2025 were 4 percentage points lower than the previous year, and the U.S. and Europe Segment saw a 8 percentage points decrease in Q4 2025 compared to Q3 2025.
• The reductions were due to scheduled maintenance shutdowns, production adjustments to align with demand, and lower international polyethylene spreads.

Cash Flow and Leverage:

• Braskem's operating cash consumption for 2025 was approximately BRL 1.4 billion, reflecting lower EBITDA due to the prolonged down cycle in the petrochemical industry.
• Corporate leverage ended the year at 14.74x, with adjusted net debt excluding Braskem Idesa at $7.5 billion, highlighting the financial pressures from reduced operating cash flow.

Strategic Response and Transformation Initiatives:

• Braskem implemented over 700 initiatives across six major fronts to mitigate the downturn cycle, preserve liquidity, and enhance competitiveness.
• The company is focusing on transforming feedstock dependency, with plans to reduce naphtha reliance and increase the use of ethanol and gas, aiming for a sustainable and competitive future.

Sentiment Analysis:

Overall Tone: Neutral

• Management acknowledges a 'very challenging year' and 'prolonged down cycle' impacting results, but highlights initiatives that generated $500M EBITDA and $600M cash in 2025, stating the company 'remains healthy financially.' They present a strategic plan for 2026 focused on resilience, financial soundness, and transformation to ensure business continuity.

Q&A:

• Question from Analyst (via summary): Considering the current context, could you provide a view of how the global industry has behaved? Have you seen reduction of relevant capacity or events of force majeure impacting the business?
  Response: No specific capacity reductions or force majeure events mentioned; focus is on geopolitical impacts and feedstock sourcing resilience.

• Question from Analyst (via summary): What would be the effects of the war on the EBITDA of the company? Could we expect an EBITDA about $1 billion?
  Response: Company does not provide formal guidance. Historical EBITDA ranges are $2.5B-$4B. Impact depends on conflict duration and spread volatility; external consultancy expects spreads to reach historical levels over time.

• Question from Analyst (via summary): In the previous year, have you been able to diversify the purchase of naphtha, reducing the exposure of naphtha for Petrobras?
  Response: Sourcing is not at risk; main supplier is U.S., which is a net exporter. Strategy aims to reduce NAFTA dependency to 60% by 2030, using ethanol and gas.

• Question from Analyst (via summary): With the fall of the bond interest rates and the lower ratings to D and a possible reorganization via Chapter 11, what’s the real likelihood of this scenario to materialize?
  Response: Reorganization is an absolute priority for liquidity. No speculation on routes; company will share material updates in real time.

• Question from Analyst (via summary): What was the result of the meeting that was held yesterday? Will the new protections be implemented?
  Response: GECEX opted not to implement the recommended $700/ton anti-dumping norm for U.S. PE; decision maintained due to 'public interest.' Company will appeal, citing strong case and unfair pricing exacerbated by war.

• Question from Analyst (via summary): Why are there questions in the capacity to continue operating as we saw in the financial report of Braskem?
  Response: Auditors' mention of uncertainties relates to planned capital structure restructuring, not operational health. Company is actively engaged in implementing the plan to ensure continuity.

• Question from Analyst (via summary): The company announced investment in the Transformar Rio project and continues with strategic investments. Considering the high leverage and cash burn, how is the company going to finance this CapEx without affecting its capital structure?
  Response: Financing is included in the capital structure reorganization plan; resources are earmarked to support the project, which is essential for competitiveness and sustainability.

• Question from Analyst (via summary): What are the potential impacts since the closure of the Strait of Hormuz, as what we have seen has increased?
  Response: Different scenarios are considered; feedstock prices (naphtha) are rising, impacting margins. External consultancies expect ~50% spread increase in Q1 2026. Conflict duration is uncertain, with potential for long-term negotiations.

• Question from Analyst (via summary): In relation to the potential change of control, could the company provide an update on the latest facts, please?
  Response: Company is not party to discussions; will notify market if/when informed. Ongoing due diligence with potential investors; no material developments to report.

• Question from Analyst (via summary): Could there be any type of support from Petrobras to Braskem considering that the transaction with IG4 has been approved?
  Response: Support depends on Petrobras; discussions remain ongoing. Petrobras is aware of the situation and has significant interest in Braskem, with regular communication channels.

Contradiction Point 1

Status of Long-Term Ethane Supply Contract with Petrobras for Transform Rio

Contradiction on whether the contract has been signed or is still pending, directly impacting project certainty and funding clarity.

[Questioner's Name] - [Questioner's Name]

2025Q4: The capital structure reorganization includes the necessary resources for the transformation project, which has been approved by the board. - [Felipe Montoro Jens](CFO) & [Roberto Ramos](CEO)

How will Braskem finance the capital expenditure for its transformation plan (e.g., Transformar Rio project) without negatively affecting its capital structure, and has there been any reevaluation of the project scope? - Joaquin (Moneda)

2025Q3: The terms of the ethane supply agreement with Petrobras have been approved by Braskem's Board, but the contract has not yet been signed. Negotiations for secondary, non-material conditions are ongoing... - [Unknown Executive]

Contradiction Point 2

Timeline for Completion of Transform Rio Project

Contradiction on the project completion timeline, with 2025Q4 implying it's already underway and funded, while 2025Q3 gives a specific end date.

[Questioner's Name] - [Questioner's Name]

2025Q4: The capital structure reorganization includes the necessary resources for the transformation project... - [Felipe Montoro Jens](CFO) & [Roberto Ramos](CEO)

How will Braskem finance the capital expenditure for its transformation plan (e.g., Transformar Rio project) without negatively affecting its capital structure, and has there been any reevaluation of the project scope? - Anônimo (Unknown)

2025Q3: The Transform Rio project... will run from now until end of 2028/early 2029. - [Felipe Montoro Jens](CFO)

Contradiction Point 3

Financial Impact and Structure of the Alagoas Agreement

Contradiction on the financial burden and payment flexibility of the Alagoas agreement, affecting liquidity outlook.

[Questioner's Name] - [Questioner's Name]

2025Q4: The company is preparing for multiple scenarios and is focused on preserving liquidity. - [Rosana Avolio](IR/SP/MI Director) & [Roberto Ramos](CEO)

What is the impact of the war on Braskem's EBITDA, and could it be approximately $1 billion? - Anônimo (Unknown)

2025Q3: The payment schedule is for 10 annual installments. The initial payments until 2030 are designed to respect Braskem's projected financial capacity... - [Felipe Montoro Jens](CFO)

Contradiction Point 4

Strategy for Addressing Financial Health and Leverage

Contradiction on primary method to improve leverage and company health.

(Not specified in provided data) - (Not specified in provided data)

2025Q4: The capital structure reorganization includes the necessary resources for the transformation project... The project is not just an expansion but an integrated strategy to replace naphtha-based feedstocks with gas and green (ethanol) feedstocks in Rio, improving both competitiveness and sustainability. - [Felipe Montoro Jens](CFO) & [Roberto Ramos](CEO)

How will Braskem finance the capital expenditure for its transformation plan without negatively affecting its capital structure, and has there been any reevaluation of the project scope? - Gabriel Coelho Barra (Citigroup Inc.)

2025Q2: [The strategy to reduce leverage is to] grow EBITDA through the 'Fly up to green and switch to gas' transformation plan. This involves improving productivity, gaining competitiveness via government support (e.g., REIQ, Presiq, antidumping), and focusing on maximizing EBITDA and cash. Asset sales are not the primary focus... - [Felipe Montoro Jens](CFO)

Contradiction Point 5

Financial Outlook & EBITDA Guidance

2025Q4 provides specific historical EBITDA ranges, contradicting 2025Q1's forward-looking financial comfort target.

Unidentified Analyst - Unidentified Analyst

2025Q4: Historically, consolidated EBITDA between 2014-2025 ranged from <$2.5B to $4B>. - [Responder's Name](CFO)

What is the expected impact of the war on Braskem's EBITDA, and could it be around $1 billion? - Regis Cardoso (XP Investimentos)

2025Q1: Based on a 3-4 year cycle recovery timeline... Braskem aims to reach a normalized EBITDA of ~$2 billion. - [Rosana Avolio](CFO)