By Brazil Stock Guide — Braskem (B3: BRKM5), Latin America’s largest petrochemical producer, reported a consolidated net loss of R$1.2 billion in the third quarter of 2026, reversing a R$3.3 billion profit in the previous quarter, as loans and debentures classified as short-term liabilities surged to R$52.4 billion from R$9.1 billion, according to financial results released on Thursday (November 12).
The shift pushed the company’s total current liabilities to R$82.2 billion at the end of September, up 116% from R$38 billion in June. Meanwhile, loans and debentures classified as long-term liabilities fell to just R$5 million from R$40.2 billion. The scale of the reclassification highlights mounting pressure on Braskem’s financial structure, although it does not necessarily mean the entire amount is immediately payable.
The deterioration comes as the company remains under severe credit stress. Braskem’s earnings report lists an S&P Global Ratings credit rating of D, assigned in June, and a Fitch Ratings classification of RD, or restricted default, assigned in August. Shareholders’ equity stood at negative R$14.2 billion at the end of September, compared with negative R$13.1 billion three months earlier.
Profitability Slumps as Petrochemical Margins Normalize
Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) plunged 63% quarter-on-quarter to R$1.96 billion, while net revenue declined 10% to R$19.58 billion. The company’s recurring EBITDA margin, measured in U.S. dollars, narrowed to 10% from 24%, primarily reflecting the normalization of international petrochemical spreads following price increases linked to geopolitical tensions in the Middle East.
Despite the sharp sequential deterioration, recurring EBITDA was still 140% higher in Brazilian reais than in the third quarter of 2025. The figures suggest that Braskem has recovered from the exceptionally weak operating conditions of a year earlier but remains exposed to volatile commodity prices and uncertain profit margins.
In Brazil and the rest of South America, recurring EBITDA declined 69% from the previous quarter to US$267 million. Earnings from the United States and Europe plunged 90% to US$15 million, while Braskem Idesa, the company’s Mexican joint venture, reported recurring EBITDA of just US$2 million, down 96%. The sharp decline came despite higher domestic resin sales in Brazil and stronger export volumes.
Petrobras Trade Credit Supports Cash Generation
Braskem reported R$2.2 billion in operating cash generation under its management reporting methodology, up 15% from the previous quarter, supported primarily by a R$1 billion improvement in working capital. A key contributor was approximately R$1.6 billion in commercial credit used to purchase petrochemical feedstock from state-controlled oil company Petrobras, alongside a R$475 million positive contribution from inventory reductions.
The stronger quarterly cash performance, however, masks continued financial strain. During the first nine months of 2026, Braskem recorded recurring cash consumption of R$4.44 billion. After accounting for payments related to the geological disaster in Alagoas and other adjustments, cumulative cash consumption before debt-related transactions reached R$5.39 billion.
Corporate adjusted net debt reached US$9.9 billion at the end of September, up 5% from June and 25% from a year earlier. According to Braskem, the quarterly increase primarily reflected the accounting reclassification of R$2.1 billion in letters of credit renegotiated with financial institutions, previously recorded as trade payables. The corporate net debt-to-recurring EBITDA ratio improved to 6.36 times from 6.74 times, but remained elevated.
Net financial expenses widened to R$1.61 billion from R$494 million in the previous quarter, partly reflecting a reversal of earlier gains on derivatives and foreign-exchange movements. Gross financial expenses reached R$1.78 billion, adding further pressure to the company’s bottom line.
Alagoas Liabilities and Mexican Operations Add to Financial Pressure
Braskem continues to face substantial financial obligations stemming from the ground subsidence disaster in Maceió, the capital of Brazil’s northeastern state of Alagoas, which was linked to decades of underground rock-salt mining by the company.
Payments related to the disaster totaled R$183 million during the quarter and R$910 million in the first nine months of the year. At the end of September, Braskem reported approximately R$3.2 billion in provisions related to Alagoas, including both current and non-current liabilities.
In Mexico, Braskem Idesa ended the quarter with net debt of US$2.15 billion and leverage of 11.66 times recurring EBITDA over the previous 12 months. Although polyethylene sales volumes improved, sharply narrower petrochemical spreads weighed heavily on profitability.
The results underscore the challenges facing Braskem as it attempts to stabilize its finances. While the company continues to operate its production network, expand sales in selected markets and preserve liquidity, weak margins, elevated debt and the concentration of financial liabilities in the short-term portion of its balance sheet leave its capital structure under significant strain.
For investors and creditors, the central question is increasingly whether Braskem can secure a sustainable financial restructuring while navigating a petrochemical industry still struggling with excess capacity, volatile pricing and uneven global demand.
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