BAK · Braskem S.A.

Braskem’s Q1 2026 results reflect a pronounced sequential rebound in profitability, anchored by structural tax benefits and regional operational improvements. The 76% jump in consolidated Recurring EBITDA to US$192 million was overwhelmingly driven by the Brazil/South America segment’s 69% increase to US$241 million — itself fueled by a US$32 million COGS benefit from the newly expanded REIQ regime (raised from 0.73% to 5.8% effective March 2026), alongside lower recurring expenses. This gain more than offset persistent challenges in Mexico, where Recurring EBITDA turned negative at US$15 million due to a 30 percentage-point drop in utilization linked to PEMEX’s reduced ethane supply and Braskem Idesa’s liquidity-constrained import strategy. The U.S. & Europe segment’s turnaround — from US$32 million loss to US$21 million profit — stemmed from improved polypropylene market dynamics: a 6% expansion in average PP spread and 3% higher sales volume. Notably, the earnings release explicitly attributes no material impact from the Middle East conflict to Q1 results, reinforcing that these gains were internally generated. However, cash flow weakened significantly: operating cash consumption reached R$3.2 billion, reversing Q4 2025’s optimization due to working capital pressure — specifically reduced payment agreement availability with financial institutions and suppliers, plus inventory replenishment. Recurring cash consumption totaled R$4.6 billion, largely attributable to semiannual international debt interest payments concentrated in Q1 and Q3. Management also disclosed ongoing structured negotiations with creditors’ advisors regarding capital structure reorganization, signaling continued focus on financial resilience amid elevated leverage and contingent liabilities related to the Alagoas geological event — which contributed US$18 million to other expenses in Q1. No forward guidance is provided in the filing.