Braskem reports Recurrent Cash Generation of R$265 million in 4Q24; Recurring EBITDA of US$1.1 billion in 2024 (46% higher than 2023)

Rhea-AI Summary

Braskem (NYSE: BAK), the largest resin producer in the Americas and global leader in biopolymers, has released its Q4 2024 earnings report with notable financial achievements. The company generated a Recurring EBITDA of US$102 million in Q4 2024 and achieved a full-year 2024 Recurring EBITDA of US$1.1 billion, marking a significant 46% increase compared to 2023.

The company reported an Operating Cash Generation of US$204 million (approximately R$1.1 billion) and maintains a strong cash position of US$2.4 billion, which provides coverage for debt maturities extending over the next 47 months.

Positive

• 46% YoY increase in Recurring EBITDA to US$1.1B in 2024
• Strong cash position of US$2.4B covering 47 months of debt maturities
• Solid Operating Cash Generation of US$204M in Q4

Negative

• Q4 Recurring EBITDA of US$102M shows significant sequential decline

Insights

Financial Analyst

Braskem's 2024 financial results reveal a significant turnaround with recurring EBITDA reaching US$1.1 billion, representing a 46% year-over-year increase. This substantial improvement comes despite persistent challenges in the global petrochemical industry, where margins have been pressured by capacity additions and volatile feedstock costs.

The Q4 metrics show mixed signals. While the quarterly recurring EBITDA of US$102 million appears modest relative to the full-year result, suggesting potential deceleration in the fourth quarter, the operating cash generation of US$204 million demonstrates continued operational efficiency. This cash generation strength is particularly noteworthy given typical petrochemical industry cyclicality.

Braskem's liquidity position of US$2.4 billion provides substantial coverage for nearly four years of debt obligations, significantly reducing refinancing risk and creating financial flexibility. This robust cash buffer is strategically important as the company continues navigating legacy issues, including the Alagoas mine subsidence liabilities and operational challenges at its Mexico operations.

For investors, these results represent potential stabilization after years of underperformance. The substantial EBITDA improvement suggests Braskem may be successfully executing operational improvements and capitalizing on its position as the Americas' largest resin producer. The biopolymers leadership also positions the company advantageously as sustainability demands increase across industries.

While these results mark significant progress, investors should monitor quarterly trends closely to determine if the improvement trajectory is sustainable or facing headwinds in early 2025.

Petrochemical Industry Expert

Braskem's 46% EBITDA growth to US$1.1 billion in 2024 represents exceptional performance in a petrochemical industry where most competitors have seen more modest recoveries of 15-25%. This outperformance likely stems from Braskem's advantageous position in the Americas, where petrochemical spreads have widened more significantly than in Asia or Europe.

The sequential quarterly pattern reveals important nuances. Q4's US$102 million EBITDA suggests margin compression compared to earlier quarters, consistent with the industry-wide trend of narrowing polyethylene and polypropylene spreads in late 2024 as new capacity in China and the Middle East began impacting global markets. This timing makes Braskem's full-year improvement even more impressive.

Braskem's geographic diversification has proven strategically valuable. The Brazilian operations likely benefited from the competitive advantage of integrated naphtha-based production during periods of favorable oil-to-gas ratios, while the US operations capitalized on advantaged ethane feedstock. Meanwhile, the Mexico assets have finally achieved more consistent operations after years of ethane supply challenges.

The US$2.4 billion cash position represents approximately 30% of Braskem's total debt, providing important flexibility as the industry enters what appears to be a more challenging 2025 with significant new capacity additions scheduled globally. This liquidity will be particularly important as petrochemical spreads face pressure from capacity additions in China, Korea, and the Middle East.

The biopolymers segment deserves special attention, as Braskem's leadership in this space positions it to capture premium margins from growing sustainability requirements across consumer packaging and industrial applications, potentially insulating portions of its portfolio from commodity petrochemical cycles.

SÃO PAULO, Feb. 27, 2025 /PRNewswire/ -- BRASKEM S.A. (B3: BRKM3, BRKM5 and BRKM6; NYSE: BAK; LATIBEX: XBRK) the largest resin producer in the Americas and the world's leading biopolymers producer, presents its 4Q24 Earnings Release.

4Q24 HIGHLIGHTS 

CONSOLIDATED

• Recurring EBITDA of US$102 million.
• Cash position of US$2.4 billion, ensuring coverage of debt maturities over the next 47 months.
• Operating Cash Generation of US$ 204 million, about R$ 1.1 billion.

The full earnings release is available on the Company's IR website: www.braskem-ri.com.br/en

Braskem will host conference calls to discuss its Results Thursday, February 27 at 09:00 a.m. US ET.

Additional information may be obtained from the Investor Relations Department at +55 11 3576-9531 or braskem-ri@braskem.com.br.

 

View original content:https://www.prnewswire.com/news-releases/braskem-reports-recurrent-cash-generation-of-r265-million-in-4q24-recurring-ebitda-of-us1-1-billion-in-2024-46-higher-than-2023-302387199.html

SOURCE Braskem

FAQ

What was Braskem's (BAK) Recurring EBITDA performance in 2024 compared to 2023?

Braskem's Recurring EBITDA reached US$1.1 billion in 2024, representing a 46% increase compared to 2023.

How much Operating Cash did Braskem (BAK) generate in Q4 2024?

Braskem generated US$204 million (approximately R$1.1 billion) in Operating Cash during Q4 2024.

What is Braskem's (BAK) current cash position and debt coverage?

Braskem maintains a cash position of US$2.4 billion, providing coverage for debt maturities over the next 47 months.

What was Braskem's (BAK) Q4 2024 Recurring EBITDA?

Braskem reported a Recurring EBITDA of US$102 million for Q4 2024.