Covering less than 0.1% of the world’s ocean, coral reefs support more than 25% of marine biodiversity, and are...
Braskem has records results in 2021 and returns to investment grade
Net sales exceed BRL105 billion in the year; recurring operational result reaches BRL30.3 billion; net profit registers BRL14.1 billion
Braskem closed 2021 with historic results, both in recurring operational results and in net income and cash generation. The year was also marked by a low level of leverage, by the company’s return to investment grade rating from the risk agencies, and by advances in the ESG (environment, social responsibility and governance) agenda. “It was a year of many challenges and achievements, in which we kept our focus on people’s safety, customer service, and financial health. It was also marked by important socio-environmental advances that are helping to build the Braskem of the future. We have reinforced our commitment to sustainability indicators, such as the reduction of CO2 emissions and the increase in the portfolio of recycled and renewable products,” says Roberto Simões, president of Braskem.
In the fourth quarter of 2021, Braskem recorded recurring operational results of BRL6.3 billion, 40% higher than the same period of the previous year. In the year, the recurring operating result was BRL30.3 billion, 176% higher than in 2020. In the fourth quarter, the net profit was BRL530 million, closing the year with a total profit of BRL14 billion. The free cash flow generation in the last three months of 2021 was BRL3.1 billion, reaching a record of BRL10.7 billion for the year. Net sales revenue in 2021 also reached an all-time high of BRL105.6 billion.
In this scenario, corporate leverage, measured by the ratio of adjusted net debt to recurring operating income in dollars, ended 2021 at 0.94x.
In December, the risk-rating agency Fitch Ratings raised the Company’s risk level on a global scale, regaining its investment grade rating. In September, Braskem had already regained its investment grade by S&P Global Ratings (S&P).
Another highlight was the return to B3 Sustainability Index (ISE), which reflects the company’s ongoing commitment to the best practices in corporate governance, social responsibility, economic-financial and environmental management. Braskem was also included in the CDP (Carbon Disclosure Program) ranking of leading companies in water and climate risk management for the seventh consecutive time, in addition to achieving the top ranking in the “Water List” for the fifth consecutive time, and remaining as a leading company in the “Climate List” for the seventh consecutive time and in “Supply Chain” for the sixth consecutive time, reinforcing its engagement and performance with a positive impact on the topic.
The highlight of the ESG agenda in November was the signing of a memorandum of understanding between Braskem and Lummus Technology, a global leader in process technologies involving ethylene, petrochemicals, energy transition, among others, for the joint licensing of Braskem’s green ethylene technology for two projects: one under development in North America and the other under analysis in Thailand.
The start of operation in December of the first mechanical recycling line, the result of the partnership between Braskem and Valoren, was another milestone. The plant, located in Indaiatuba (SP), has the capacity to transform about 250 million packages into 14 thousand tons per year of high quality post-consumer resin.
In 2021, Braskem was involved in 146 social projects that benefited more than 800 thousand people globally, including private social investments, donations, volunteer programs and initiatives to fight the pandemic. This social investment by the company reached almost BRL40 million in the year.
Under the social aspect, Braskem is recognized by the Forbes ranking as one of the best employers in the world, being one of the 3 Brazilian companies in the ranking of 750 participants.
By 2021,Braskem has signed a total of five contracts for the purchase of renewable energy, which will avoid the emission of more than 220 thousand tons of CO2 per year, over 20 years, totaling more than 4.4 million tons of CO2 in the period.
Furthermore, Braskem and the French company Veolia have announced a joint investment of BRL400 million to produce renewable energy from eucalyptus biomass in Alagoas. The project will generate 900,000 tons of steam/year, during 20 years, which will mean the reduction of emissions of approximately 150,000 tons of CO2 per year. In addition, it will create more than 400 direct jobs during the construction phase and approximately 100 jobs in the operation (post construction).
Finally, the Company acquired a minority stake in the wind energy generating Special Purpose Companies Ventos de Santa Amélia and Ventos de Santo Abelardo, both controlled by FIPSalus of the Casa dos Ventos group. This acquisition is in line with the Company’s strategy to expand the use of clean energy sources in its operations, inserting the Company in the renewable energy self-production regime.
Mexico and Alagoas
In Mexico, the utilization rate of polyethylene plants in the fourth quarter was 81 percent, up 13 percentage points from the previous quarter and up 34 percentage points from the fourth quarter of 2020. This was due to the record quarterly ethane imports from the US by the Fast Track solution and the increased supply of ethane by Mexico’s state-owned oil and gas company, Pemex, in line with the volumes established in the ethane supply contract amendment signed in October 2021. Additionally, the Boards of Directors of BraskemIdesa and Braskem approved the investment of USD400 million for the construction of an ethane import terminal in Mexico.
In Alagoas, the work of the Financial Compensation and Relocation Support Program continues, which is the result of an agreement between Braskem and the Alagoas authorities to assist the population affected by the geological phenomenon in Maceió.
By February 2022, more than 14,000 properties have been vacated, exceeding 97% of the total area defined by the Civil Defense. More than 13,000 compensation proposals were submitted, with a 99.5% acceptance rate. Of these, 10.2 thousand indemnities have already been paid, for a total of BRL2.18 billion in indemnities and financial aid. More than 3.4 thousand compensation proposals were presented to traders and businessmen.
The company has been acting proactively in all dimensions related to Alagoas and fully complying with the commitments undertaken, also highlighting: conclusion of the environmental diagnosis of the area and significant progress in the social diagnosis; conclusion of the Urban Mobility Plan and the start of actions planned for the next quarter; the start of demolition work on the Mutange slope; and the plan to close the salt wells, exceeding 48% of progress in filling the first two cavities with sand.
Looking to the future, Braskem will keep its focus on its strategic pillars, which are: the search for greater productivity and competitiveness; growth and geographic, raw material and product diversification; and sustainability. Thus, by 2022 the company foresees as important “growth avenues” the renewables and recycling businesses and improving the productivity of existing assets.