Braskem maintained the strong results it has delivered over the past few quarters, reporting EBITDA of R$3.1 billion in the first quarter of 2016, up 106% from the year-ago period. The main factors driving this performance were higher exports of thermoplastic resins, the continued strong performance of the operations in the United States and Europe, better spreads for basic petrochemicals and resins in the international market and the average depreciation in the Brazilian real against the U.S. dollar of 37%. In U.S. dollar, EBITDA advanced 54% to US$780 million.
The industrial units in the United States and Europe continued to operate above their nominal capacity, with the strong demand for polypropylene in the U.S. market leading them to operate at an average capacity utilization rate of 100%. Production amounted to 499 kton and sales came to 500 kton, increasing 8% and 9%, respectively, from the first quarter of 2015. In the period from January to March 2016, the units in the United States and Europe recorded EBITDA of R$855 million, which represents nearly a third of the Company's consolidated EBITDA.
In Brazil, Braskem's crackers operated at an average capacity utilization rate of 89%, in line with the year-ago period. Compared to the last quarter of 2015, however, the average capacity utilization rate increased 6 percentage points, following the normalization of operations at the São Paulo cracker and the capture of operating improvements at the petrochemical complex in Triunfo, Rio Grande do Sul. Resin exports amounted to 415 kton, increasing 62% from 1Q15 and offsetting the contraction in the domestic market. In 1Q16, the operations in Brazilian, including exports, posted EBITDA of R$2.16 billion, increasing 61% from the year-ago period.
Demand for resins in the overall Brazilian market amounted to 1.2 million tons in the first quarter of 2016, decreasing 18% from the first quarter of last year, a period that benefitted from the restocking trend in the plastic converters chain. Braskem's sales in the domestic market came to 782 kton, following the contraction in the Brazilian market.
Braskem's net income amounted to R$747 million in the first quarter of 2016. Meanwhile, its consolidated net revenue came to R$12.2 billion, growing 19%, influenced by higher prices for petrochemicals when converted into Brazilian real. Braskem's financial leverage, as measured by the ratio of net debt to EBITDA in U.S. dollar, decreased once again, ended the quarter at 1.72 times, which is the lowest level of the last ten years.
POLYETHYLENE PRODUCTION IN MEXICO
In April, the petrochemical complex in Mexico, which is operated by Braskem Idesa, launched its production of polyethylene, marking an important advance in Braskem's strategy of international expansion and feedstock diversification. Located in the Mexican state of Veracruz, the petrochemical complex has annual production capacity of over 1 million tons of polyethylene, which is produced from ethane feedstock supplied by PEMEX.
"Braskem has been able to maintain a consistent strategy thanks to the results contributed by its exports and overseas operations," said Fernando Musa, CEO of Braskem. "In view of this scenario, the company remains focused on the goal of improving the competitiveness of its operations."
A subsidiary of the Odebrecht Group, Braskem is the largest thermoplastic resins producer in the Americas, with annual production volume of over 16 million tons, which includes other chemical products and basic petrochemicals, with annual revenue of R$54 billion. Driven by its purpose of improving people's lives and creating sustainable solutions in chemicals and plastics, Braskem is present in more than 70 countries, has around 8,000 Team Members and operates 40 industrial units in Brazil, the United States, Germany and Mexico, the latter in partnership with Mexican company Idesa.