By Brazil Stock Guide – The second quarter offered Braskem (B3: BRKM3, BRKM5 and BRKM6; NYSE: BAK) a rare operational and cash-flow reprieve. The company reported net income attributable to shareholders of R$3.33 billion in the second quarter of 2026, reversing a R$267 million loss a year earlier, driven by a sharp expansion in international resin and chemical spreads.
Net revenue rose 22% to R$21.72 billion. Recurring EBITDA surged to R$5.25 billion from R$427 million, more than 12 times the result reported in the second quarter of 2025 and 422% above the previous quarter. Gross profit reached R$5.32 billion, compared with just R$362 million a year earlier.
The performance reflected a temporary dislocation in global petrochemical markets caused by the conflict in the Middle East. Restrictions on raw-material supplies, particularly to Asia, pushed up oil and naphtha prices and increased production costs for marginal Asian producers, creating room for higher resin and chemical prices.
In Brazil and South America, average resin spreads rose 82% from the first quarter and 69% over 12 months. Spreads for key chemicals increased 98% and 67%, respectively. Recurring EBITDA in the region reached R$4.37 billion.
The operation also benefited from a R$578 million impact related to PIS/Cofins tax credits under REIQ Insumos, a tax incentive approved by Brazil’s Congress for the petrochemical industry.
In the US and Europe, the average polypropylene spread increased 28% from the previous quarter and 24% over 12 months, lifting recurring EBITDA to R$739 million. In Mexico, the polyethylene spread rose 73% sequentially and 98% year over year, while EBITDA reached R$289 million.
Gains came from pricing, not volumes
The recovery was not accompanied by higher sales volumes. In Brazil, resin sales fell 8% from the second quarter of 2025, while sales of key chemicals declined 5%. Brazilian resin exports dropped 23%.
In Mexico, sales fell 20% to 125,000 metric tons, with the utilization rate at just 43%. Volumes in the US and Europe were broadly stable, declining 1%.
The figures show that the improvement came primarily from wider spreads and the company’s ability to capture more favorable pricing, rather than from a structural recovery in demand.
Braskem itself warned that part of the boost had already lost momentum during the quarter. Expectations of a possible ceasefire in the Middle East led customers to delay purchases in anticipation of lower prices. By the end of June, international resin spreads had returned to the levels seen before the conflict began.
Cash improves, but first half remains negative
Operating cash generation reached R$1.93 billion, reversing a R$175 million outflow a year earlier. The improvement in EBITDA was partly absorbed by a R$2.76 billion working-capital outflow amid raw-material price volatility, higher inventories and reduced access to payment arrangements with banks and suppliers.
Recurring cash generation totaled R$1.05 billion. After R$241 million in disbursements related to the geological event in Alagoas, cash generation before debt service stood at R$807 million.
Despite the quarterly improvement, Braskem still recorded recurring cash burn of R$4.43 billion in the first half. Cash consumption before debt reached R$5.2 billion, reflecting the heavy outflows recorded during the first three months of the year.
The company posted a R$494 million net financial loss, compared with a R$27 million loss a year earlier. Interest expenses totaled R$1.19 billion, partly offset by R$859 million in foreign-exchange and derivatives gains.
Restructuring remains unresolved
Braskem’s adjusted net debt, excluding its Mexican unit Braskem Idesa and TQPM, ended June at R$48.8 billion, or US$9.43 billion, up 3% in dollar terms from the previous quarter and 24% over 12 months. Leverage fell to 6.74 times from 18.18 times, mainly because of the increase in trailing 12-month EBITDA.
Expanded financial obligations, including letters of credit and liabilities related to the environmental disaster in Alagoas, reached R$58 billion, or US$11.2 billion. Comparable corporate cash and financial investments fell 42% over 12 months to just over US$1 billion.
The company remains in negotiations with creditor groups after failing to reach an agreement on a proposal presented in June. A Brazilian court injunction suspended enforcement actions by creditors participating in the mediation for 60 days. The measure was also preliminarily recognized in the US through a Chapter 15 proceeding. The protection expires on August 24.
Following the expiration of cure periods and the suspension of certain payments, Braskem said it entered default under some financial instruments in July. The affected obligations will be reclassified as current liabilities, although the court protections temporarily prevent the creditors involved from pursuing enforcement actions or asset seizures.
Braskem, controlled by IG4 Capital and Petrobras, has received preliminary, nonbinding proposals that include a potential capitalization and the granting of collateral over assets. The company said no decision has been reached on the terms of the restructuring.
Despite the strong result, the normalization of spreads suggests the improvement is temporary and does not remove Braskem’s main challenge: reaching an agreement with creditors before liquidity pressures once again dominate its results.
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