EX-99.1 3 ex-99_1.txt RELEASE DATED AUGUST 5, 2003 Braskem COMPANHIA BOVESPA NIVEL 1 BAK MERCADO LISTED BOVESPA - BRASIL NYSE BOVESPA: BRKM NYSE: BAK www.braskem.com.br -------------------------------------------------------------------------------- BRASKEM ANNOUNCES NET EARNINGS OF R$ 468 MILLION FOR THE FIRST HALF 2003 -------------------------------------------------------------------------------- (Sao Paulo, Brazil, August 5, 2003) Braskem S.A. (BOVESPA: BRKM) (NYSE: BAK) today announced its earnings for the second quarter of 2003. Results are stated in Reais in accordance with the Brazilian Corporate Law, except that the results presented herein are not in accordance with CVM Instruction 247 as they exclude the effects of proportional consolidation. As the business combination that formed Braskem occurred on August 16, 2002, the financial information and analysis contained herein are based on Braskem's unaudited consolidated pro-forma financial statements, taking into account Braskem's stakes in OPP Quimica S.A. ("OPP Quimica"), Trikem S.A. ("Trikem"), Nitrocarbono S.A. ("Nitrocarbono") and Polialden Petroquimica S.A. (Polialden) as if the corporate structure on June 30, 2003 had existed since the beginning of the fiscal-year 2002. The comments in this release refer to unaudited consolidated earnings with all comparisons being made with the same period in 2002, except where otherwise indicated. Braskem's unaudited consolidated pro-forma balance sheet and income statement have been reviewed by independent auditors and reflect the elimination of the effects of CVM Instruction 247 (i.e. only those investments under the direct management of Braskem are consolidated, and Braskem's stakes in Politeno Industria e Comercio S.A. and COPESUL -- Companhia Petroquimica do Sul are recognized via the equity accounting method). On June 30, 2003, the Brazilian Real/US Dollar exchange rate was R$ 2.8720/US$ 1.00. 1. Second Quarter Highlights -------------------------------------------------------------------------------- o Braskem's net revenues totaled R$2.2 billion in the second quarter of 2003, 47% higher than the net revenues of R$1.5 billion in the second quarter of 2002. Such increase reflects Braskem's successful strategy of realigning the prices of its products sold in the domestic market with international prices. In the first half of this year, Braskem's net revenues totaled R$4.4 billion, 65% higher than the net revenue of R$ 2.7 billion in the first half of 2002. o Braskem's strong performance with respect to exports contributed to the increase in its net revenues. During the second quarter of 2003, net revenues from exports to foreign markets, including sales within Mercosul, totaled US$181 million, which is 32% higher than net revenues of US$137 million reported during the same quarter of the previous year. During the first half of 2003, net revenues from exports totaled US$ 317 million, 38% higher than US$230 million during the first half of 2002. o Synergies arising from Braskem's continuing integration process through June 30, 2003, amounted to R$240 million, on an annualized and recurring basis, out of an projected total of R$330 million. o Selling, general and administrative expenses (SG&A, except for expenses arising from depreciation and amortization) during the first half of this year totaled R$176 million, 10% higher than these expenses during the same period in 2002. However, this 10% increase is significantly lower than the inflation rate in Brazil over the last 12 months. In addition, during the first quarter of 2003, such expenses amounted to 4.7% of Braskem's net revenues for such quarter, as compared to 6.5% of Braskem's net revenues during the first quarter of 2002. In the first half of 2003, the same expenses amounted to 4% of Braskem's net revenues, while in the first half of the previous year -------------------------------------------------------------------------------- - 1 - these expenses amounted to 5.9% of the Company's net revenues. Such decreases, as measured in constant currency, are associated with the synergies arising from Braskem's continuing integration process and with overall improvement of the company's productivity levels. o EBITDA for the second quarter of 2003 totaled R$405 million, 28% above the EBITDA of R$ 315 million registered during the second quarter of 2002. In the second quarter of 2003, Braskem's EBITDA margin was 19%. EBITDA for the first half of 2003 was R$ 855 million, 54% higher than the EBITDA of R$554 million for the same period of the previous year. Braskem's EBITDA margin during the first half of 2003 was 19%. Operating cash flow totaled R$879 million in the first half of 2003 and R$2.1 billion during the last 12 months. o Net income during the second quarter of 2003 was R$338 million, offsetting a loss of $316 million registered during the same period of the previous year. Net income for the first half of 2003 was R$468 million, offsetting a loss of R$480 million in the first semester of 2002. o In the second quarter of 2003 Braskem reduced its net debt by R$659 million - from R$ 6.4 billion on March 31 2003, to R$ 5.7 billion, on June 30, 2003. o As compared to the fiscal-year-end 2002, in the first half of 2003, Braskem reduced its net debt by R$1.1 billion, from R$6.8 billion on December 31, 2002 to R$5.7 billion on June 30, 2003. During the second quarter of 2003, Braskem decreased its short-term debt by R$345 million. Decreasing Debt Changes in Net Debt dec/02 mar/03 jun/03 ------------------- ------ ------ ------ NET DEBT (R$ million) 6,815 6,365 5,706 NET DEBT/EBITDA (LTM*) 5.10 4.11 3.49 -------------------------------------------------------- * Last twelve months; does not include non-recurring items in the calculation of EBITDA o As a further step in its corporate integration process, Braskem entered into an agreement to purchase the common shares of the capital stock of its subsidiaries Trikem and Polialden owned by Mitsubishi Chemical Corporation ("Mitsubishi") and also entered into a memorandum of understanding with Nissho Iwai Corporation ("Nissho Iwai"), by which the latter will exchange its stakes in Trikem and Polialden for equity interest in Braskem. By means of this transaction, Nissho Iwai will hold 4.2% of Braskem's voting capital, corresponding to 1.6% of its total capital. Further information on such transactions is available in the Investor Relations section of Braskem's webpage at www.braskem.com.br. The conclusion of this further step in the process of Braskem's corporate integration will increase Braskem's interests in its subsidiaries, Trikem and Polialden, as follows: -------------------------------------------------------------------------------- - 2 - [GRAPHIC OMITTED] [Graphic depicts that (i) Previ owns 2.9% of the voting capital stock of Braskem and 3.4% of the total capital stock of Braskem ; Petroquisa owns 7.8% of the voting capital stock and 11.1% of the total capital stock of Braskem; Odebrecht owns 43.2% of the voting capital stock and 43.3% of the total capital stock of Braskem; Norquisa owns 29.5% of the voting capital stock and 12.0% of the total capital stock of Braskem; Mariani owns 3.4% of the voting capital stock and 3.5% of the total capital stock of Braskem; Petros owns 2.9% of the voting capital stock and 1.1% of the total capital stock of Braskem; and unspecified investors in the stock market own 10.2% of the voting capital stock and 25.6% of the total capital stock of Braskem; and (2) Braskem owns 29.5% of the total and voting capital stock of Copesul; 100% of the voting capital stock and 56.3% of the total capital stock of Polialden; 92.9% of the voting capital stock and 51.6% of the total capital stock of Trikem; and 35.0% of the voting capital stock and 33.5% of the total capital stock of Politeno.] % Voting Capital - % Total Capital Braskem in Numbers Net Sales (R$ millions) EBITDA (R$ millions) [Graphic omitted] [Graphic depicts [Graphic omitted] [Graphic depicts that in the first half of 2003 that in the first half of 2003 Braskem's net sales in Reais were Braskem's EBITDA in Reais was R$855 R$4.447 billion, 65% higher than million, 54% higher than R$554 recorded in the previous year of million recorded in the first half R$2.697 billion.] of 2002.] Net Profit (R$ millions) [Graphic omitted] [Graphic depicts that in the first half of 2002 Braskem had a loss of R$480 million compared to a gain of R$468 million in the first half of 2003, which corresponds to a difference of R$948 million.] Net debt (R$ millions) Net Debt/EBITDA (LTM*) [Graphic omitted] [Graphic depicts [Graphic omitted] [Graphic depicts that in June 2003 Braskem's net that the ratio between Braskem's debt was R$5.706 billion compared net debt and EBITDA in December to R$6.365 billion in March 2003, 2002 was 5.10, in March 2003 was and R$6.815 billion in December 4.11 and in June 2003 was 3.49, 2002, which corresponds to a which corresponds to a decrease of R$1.109 billion decrease between 32% between December 2002 and June December 2002 and June 2003.] 2003.] * LTM - last twelve months; non recurring items excluded from the calculation of EBITDA. -------------------------------------------------------------------------------- - 3 - 2. Operating Performance -------------------------------------------------------------------------------- o Industrial and Sales Performance
2Q03 2Q02 Chg% 1HO3 1HO2 Chg% Production Volume - tons (A) (B) (A)/(B) (C) (D) (C)/(D) ------------------------ ----- ----- ------- ----- ----- ------- Polyolefin Unit - PE's-Polyethylene 160,485 138,003 16% 317,173 292,799 8% - PP-Polypropylene 102,661 98,353 4% 210,193 190,884 10% Vinyls Unit - PVC - Polyvinyl Chloride 85,494 104,477 -18% 189,338 192,040 -1% - Caustic Soda 110,943 91,056 22% 208,171 182,651 14% Basic Petrochemicals Unit - Ethylene 251,266 198,112 27% 480,431 422,880 14% - Propylene 118,554 89,132 33% 226,186 191,821 18% Business Development Unit - PET 9,466 13,763 -31% 24,377 27,873 -13% - Caprolactam 11,394 13,574 -16% 22,674 27,713 -18%
-------------------------------------------------------------------------------- Braskem's Polyolefins and Basic Petrochemicals Units presented a better operating performance during the second quarter of 2003 when compared with the same period of the preceding year. This was partially due to a maintenance shutdown in the Pirolysis I Unit at the basic petrochemicals industrial facilities, located in Camacari,Bahia, which occurred during the second quarter of 2002. The operating performance of the Vinyls Unit during the first quarter of 2003 was significantly affected by scheduled maintenance shutdowns in Braskem's PVC plants, both in Camacari,Bahia (18 days), and in Marechal Deodoro, Alagoas (7 days). Scheduled maintenance stoppages in the PET (30 days) and caprolactam (12 days) plants of the Business Development Unit also occurred during the second quarter of 2003.
2Q03 2Q02 Chg% 1HO3 1HO2 Chg% Sales Volume - tons (A) (B) (A)/(B) (C) (D) (C)/(D) ------------------- ----- ----- ------- ----- ----- ------- Polyolefin Unit - PE's-Polyethylene 142,593 140,175 2% 306,626 303,887 1% - PP-Polypropylene 94,900 98,120 -3% 206,616 193,376 7% Vinyls Unit - PVC - Polyvinyl Chloride 79,864 100,361 -20% 190,543 203,963 -7% - Caustic Soda 101,067 89,549 13% 202,984 181,185 12% Basic Petrochemicals Unit - Ethylene* 248,195 202,092 23% 478,446 430,005 11% - Propylene 118,511 86,585 37% 229,297 191,758 20% Business Development Unit - PET 8,740 17,020 -49% 22,880 30,589 -25% - Caprolactam 12,223 14,515 -16% 25,042 27,080 -8%
-------------------------------------------------------------------------------- * Of this amount, 71,000 tons (28.5%) were sold to companies that are part of Braskem (Trikem and Polialden) during the second quarter of 2003. During the first half of 2003 such amount was 174,000 tons (36.3%). -------------------------------------------------------------------------------- - 4 - Sales volumes of thermoplastic resins in the second quarter of 2003 in the domestic market totaled 326,097 tons, down 9% from the 355,676 tons sold during the same period in the preceding year. This performance reflects mainly a reduction in the economic activity in Brazil, which was partially offset by the increase in export volumes. Year-to-date local sales of thermoplastic resins totaled 726,665 tons, practically in line with the 731,815 tons sold during the first half of 2002. Braskem has maintained its strategy for the optimization of the Company's working capital utilization, continuously adjusting its production volumes in order to meet actual market demand for its products. o Exports In the second quarter of 2003 Braskem's net revenues from exports were US$181 million, 32% higher than net revenues from exports of US$137 million recorded during the previous year. Braskem's year-to-date net revenues from exports increased by 38% to US$317 million, as compared to US$230 million during the first half of 2002. Expressed as a percentage of net revenues, Braskem's net revenues from exports during the first half of 2003 were 23%, higher than the 21% of net revenues recorded during the same period of 2002. Exports Evolution Export Markets in the first half of (US$ millions) 2003 (%) [Graphic omitted] [Graphic depicts [Graphic omitted] [Graphic depicts that in the second quarter of 2003 percentage of export market: North Braskem's net revenues from exports America represents 31%; Europe in US Dollars were US$181 million, represents 28%; Asia represents 32% higher than the previous year. 20%; Latin America represents 18%; Braskem's year-to-date net revenues and Africa represents 3%.] from exports increased by 38% to US$317 million, as compared to US$230 million during the first half of 2002.] o Synergies resulting from the integration process As a result of its continuing integration process and on an annualized and recurring basis, Braskem has benefited from a total of R$240 million in already captured synergies out of a projected total of R$330 million. Synergies*: (R$ million) [Graphic omitted] [Graphic depicts that in June 2003 Braskem has realized a total of R$240 million in already captured synergies out of a projected total of R$330 million, compared with R$75 million as of December 2002 and R$53 million as of September 2002.] -------------------------------------------------------------------------------- - 5 - 3. Financial Performance -------------------------------------------------------------------------------- o Net Revenues: Net Sales During the second quarter of 2003, (R$ million Braskem's net revenues totaled R$2.155 billion, 47% higher than [Graphic omitted] [Graphic depicts the R$1.468 billion during the same that during the second quarter of period in 2002. The main driver for 2003, Braskem's net revenues this performance was the domestic totaled R$2.155 billion, 47% higher price-realignment implemented for than R$1.468 billion recorded the Company's thermoplastic resins during the same period in 2002 and and basic petrochemicals sold in that Braskem's net revenues were Brazil. R$4.447 billion in the first half of 2003, 65% higher than net Braskem's net revenues were R$4.447 revenues of R$2.697 billion during billion in the first half of 2003, the first half of 2002.] 65% higher than net revenues of R$2.697 billion during the first half of 2002. The table below provides a breakdown of net revenues per Business Unit:
Business Units 2Q03 2Q02 Chg% 1HO3 1HO2 Chg% (R$ million) (A) (B) (A)/(B) (C) (D) (C)/(D) -------------- ----- ----- ------- ----- ----- ------- Domestic Market 1,619 1,121 44 3,437 2,131 61 Basic Petrochemicals 706 360 96 1,483 728 104 Polyolefin 578 440 31 1,172 807 45 Vinyls 239 240 0 569 440 29 Business Development 95 81 18 213 156 37 Exports 536 348 54 1,009 566 78 Total Net Sales 2,155 1,468 47 4,447 2,697 65
o Cost of Goods Sold (COGS): Composition of Cost of Goods Sold In the second quarter of 2003, cost in 2Q03 (%) of goods sold ("COGS") totaled R$1.734 billion, 46% higher than Breakdown - COGS [Graphic omitted] the R$1.184 billion in the second [Graphic depicts the composition of quarter of 2002. The main reason cost of goods sold in the second for this increase was a 54% quarter of 2003: naphtha represents increase in the price of naphtha, 68.4%; other variable costs Braskem's principal raw material, represent 20.1%; depreciation between the two periods. represents 3.6%; electric energy represents 2.6%; personnel represents 1.8%; other represents 1.6%; services represent 1.3%; and materials represent 0.6%.] -------------------------------------------------------------------------------- - 6 - During the second quarter of 2003, Braskem purchased 988 thousand tons of naphtha, of which 610 thousand tons (62%) were purchased from Petrobras - Braskem's main raw material supplier. The remaining 378 thousand tons (38%) was imported directly by Braskem, mainly from African and South American suppliers. The average price of naphtha during the second quarter of 2003 was US$230/ton, a 28% decrease from the average price of US$ 318/ton during the first quarter of 2003. During the first half of 2003, Braskem's COGS was R$ 3.558 billion, 60% higher than its COGS of R$2.228 billion during the first half of 2002, as a result of an increase in the international price of naphtha. Braskem's depreciation and amortization costs associated with COGS increased 15% to R$63 million during the second quarter of 2003 from R$55 million during the same period of last year. During the first half of 2003, depreciation and amortization costs increased 7%, to R$131 million, as compared to R$123 million during the first half of 2002 o Selling, General and Administrative Expenses Selling, general and administrative ("SG&A") expenses were 4% higher during the second quarter of 2003, totaling R$100 million as compared to R$96 million during the second quarter of 2002. As a percentage of net revenues, such expenses were 4.7% in the second quarter of 2003 compared to 6.5% during the same period of 2002. During the first half of 2003, SG&A expenses increased 10% to R$176 million from R$160 million during the same period of 2002. This percentage remained below the inflation rate over the past 12 months. Such decreases, as measured in constant currency, are associated with the estimated synergies arising from Braskem's continuing integration process and to the overall improvement of the company's productivity levels. o Depreciation and Amortization Expenses Depreciation and amortization expenses totaled R$39 million during the second quarter of 2003 compared to R$187 million during the second quarter of 2002. The difference is attributed primarily to Braskem's decision to fully amortize the deferred foreign exchange losses, by registering R$167 million of these deferred expenses in the second quarter of 2002. Depreciation and amortization expenses during the second quarter of 2003 include R$27 million resulting from the amortization of portions of goodwill related to expected future profits of OPP Quimica, which merged into Braskem on March 31, 2003. Depreciation and amortization expenses decreased to R$83 million during the first half of 2003 from R$230 million during the first half of last year, primarily due to the full amortization of R$190 million of the aforementioned deferred foreign exchange losses , partially offset by expenses in respect of the amortization of portions of goodwill related to expected future profits of OPP Quimica, as already discussed. -------------------------------------------------------------------------------- - 7 - o EBITDA In the second quarter of 2003, EBITDA EBITDA was R$405 million, 28% (R$ million) higher than the R$315 million [Graphic omitted] [Graphic depicts reported in the second quarter of that in the second quarter of 2003, 2002. EBITDA was R$855 million for EBITDA was R$405 million, 29% the first half of 2003, 54% higher higher than the R$315 million than the R$554 million for the reported in the second quarter of first half of 2002. The EBITDA 2002 and that EBITDA was R$855 margin for the first half of 2003 million for the first half of 2003, was 19.2%, compared to 20.5% for 54% higher than EBITDA of R$554 the first half of 2002. million for the first half of 2002.] o Equity in Subsidiaries In the second quarter of 2003, equity in subsidiaries was a loss of R$25 million, resulting in a loss of R$5 million in equity in subsidiaries during the first half of the year, as compared to a gain of R$361 million registered in the same period of the previous year. Equity Income 2Q03 1H03 Equity Income from Subsidiaries 883 947 Equity Income from Affiliates 28,580 57,713 - Copesul 22,336 36,300 - Politeno 5,998 16,663 - Petroflex 750 5,304 - Outros (504) (555) Foreign Exchange Effects 19,503 27,713 Amortizations (75,576) (140,737) Other 1,747 49,642 --------------------------------------------------------------- TOTAL (24,863) (4,723) --------------------------------------------------------------- o Net Financial Result 2Q03 1H03 (1) Foreign Exchange (F/X) Impact 632 825 On F/X assets (126) (210) On F/X liabilities 758 1,035 (2) Financial Result excluding F/X Impact (374) (654) Interest/Monetary Restatement (167) (355) Interest 121 (210) Monetary Restatement (46) (145) CPMF, banking expenses and other (206) (298) FINANCIAL RESULT*.......(1) + (2) = 258 171 * Net F/X variation + Financial Result excluding F/X impact The net financial result in the second quarter of 2003 was a gain of R$258 million, impacted primarily by a 14% devaluation of the US Dollar against the Real, which generated a net positive exchange gain of R$632 million. The financial result during the first half of 2003 was a gain of R$ 171 million, offsetting a loss of R$1.241 billion recorded during the same period in 2002. -------------------------------------------------------------------------------- - 8 - o Net Income (loss) Net income was R$338 million during the second quarter of 2003, offsetting a loss of R$316 million during the second quarter of 2002. Decisive contributions to this result were: (i) the improvement of Braskem's commercial performance;(ii) the synergies resulting from Braskem's continuing integration process;(iii) the increase in net revenues from exports;(iv) Braskem's solid operating performance during the second quarter of 2003, as reflected by the Company's EBITDA of R$405 million during the second quarter of 2003; and (v) the positive net financial result of R$258 million, associated with the appreciation of the Brazilian Real against the US Dollar - during this period.During the first half of 2003, Braskem posted net income of R$468 million, offsetting a loss of R$480 million recorded during the same period in 2002. 4. Changes in the Indebtdeness -------------------------------------------------------------------------------- [Graphic omitted] [Graphic depicts In the second quarter of 2003, that in June 2003 Braskem's net Braskem reduced its consolidated debt was R$5.706 billion compared net debt by R$659 million (10%), to R$6.365 billion in March 2003 from R$6,365 million as of March and R$6.815 billion in December 31, 2003 to R$5,706 million as of 2002, which corresponds to a June 30, 2003. R$1.109 billion decrease between December 2002 and June 2003.] Consolidated gross debt totaled R$6,332 million as of June 30, Net Debt/EBITDA (LTM) 2003, 12% lower than the R$7.187 billion recorded as of March 31, [Graphic omitted] [Graphic depicts 2002. R$696 million of this debt is that the ratio between Braskem's comprised of debentures for which net debt and EBITDA in December payment of principal and interest 2002 was 5.10, in March 2003 was is scheduled in July 2007. 4.11 and in June 2003 was 3.49, Short-term debt obligations total which corresponds to a decrease of R$2,454 million, or 39% of 32% between December 2002 and June Braskem's total gross debt. 2003.] Braskem's has decreased its short-term debt during the second quarter of 2003 by R$345 million compared to the first quarter of 2003. Of this amount of short-term debt, approximately R$559 million is related to working capital financing, R$1.12 billion corresponds to trade finance lines and R$184 million corresponds to capital markets obligations. Braskem's remaining debt is comprised of government debt obligations and by the current portion of long-term bank loans. Braskem has been prioritizing the use of its cash flow surpluses to decrease its debt. In addition, the Company has been structuring financial transactions in the domestic and international financial markets in order to refinance its short-term obligations. In July, 2003, Braskem issued successfully the first tranche of its US$ 500 million Medium-Term Note Program, raising US$ 75 million with a tenor of one year. Finally, Braskem recently refinanced a US$ 80 million loan which matured in July 2003. Braskem's net debt is comprised of US dollar-indexed liabilities (66%); debt linked to the TJLP (Brazilian long-term interest rates) (17%); debt linked to the CDI (the Brazilian interbank rate) (9%); debt linked to the IGP-M (6%); and fixed-rate obligations (2%). -------------------------------------------------------------------------------- - 9 - 5. Capital Expenditures -------------------------------------------------------------------------------- The Company invested R$32 million in its capital expenditure programs during the second quarter of 2003, addressing the needs of its Business Units regarding operational, health, safety and environmental issues. During the first half of 2003, Braskem's operating investments amounted to R$65 million. 6. Capital Markets On June 30, 2003, Braskem's Class "A" preferred shares (BRKM5) closed trading on the Bovespa at R$373.80 per lot of 1,000 shares, which corresponded to an appreciation of 70% during the first half of 2003. During the same period,the Ibovespa index increased by 15%. During the second quarter of 2003, Braskem's preferred shares were traded in 100% of the trading sessions on Bovespa, and showed a growing average daily trading volume. Braskem's preferred shares are also traded on the New York Stock Exchange (NYSE), through Level 2 ADRs, and presented an appreciation of 94% during the first semester of 2003. Stock Price Performance in 2003 100 basis on 12/31/2003 [Graphic omitted] [Graphic depicts the percentage change in stock performance in between January 1, 2003 and June 30, 2003. A summary of the same as of the beginning, middle and end of each month follows: -------------------------------------------------------------------------------- Date BRKM5 BAK Ibovespa -------------------------------------------------------------------------------- January 1, 2003 100.0 100.0 100 -------------------------------------------------------------------------------- January 15, 2003 120.5 122.7 106.2 -------------------------------------------------------------------------------- January 31, 2003 83.6 78.8 97.1 -------------------------------------------------------------------------------- February 4, 2003 77.5 71.8 93.9 -------------------------------------------------------------------------------- February 14, 20003 71.8 66.7 89.5 -------------------------------------------------------------------------------- February 28, 2003 75.0 69.7 91.2 -------------------------------------------------------------------------------- March 5, 2003 75.5 69.7 91.45 -------------------------------------------------------------------------------- March 14, 2003 76.4 74.5 95.9 -------------------------------------------------------------------------------- March 31, 2003 96.9 96.9 100.0 -------------------------------------------------------------------------------- April 1, 2003 103.6 101.5 102.9 -------------------------------------------------------------------------------- April 15, 2003 115.0 121.2 107.4 -------------------------------------------------------------------------------- April 30, 2003 152.7 173.0 111.4 -------------------------------------------------------------------------------- May 2, 2003 155.0 175.8 113.7 -------------------------------------------------------------------------------- May 15, 2003 164.0 186.4 116.5 -------------------------------------------------------------------------------- May 30, 2003 163.6 187.3 119.1 -------------------------------------------------------------------------------- June 2, 2003 159.6 179.0 117.4 -------------------------------------------------------------------------------- June 13, 2003 179.1 207.6 121.9 -------------------------------------------------------------------------------- June 30, 2003 169.9 194.2 115.1] -------------------------------------------------------------------------------- Braskem is listed on the Bovespa as a Level I Corporate Governance company and its preferred shares are part of the Ibovespa index and the IGC index (Differentiated Corporate Governance Index). -------------------------------------------------------------------------------- - 10 - 7. Earnings Conference Call and Presentation to Investment Community Braskem will present its results for the first half of 2003 to the domestic financial community at meetings to be held at APIMEC in Sao Paulo and ABAMEC in Rio de Janeiro on August 12, 2003. Additionally, Braskem will hold an international conference call on August 14, 2003. For further details, please visit Braskem's website at www.braskem.com.br or contact Braskem's Investor Relations Department. -------------------------------------------------------------------------------- Braskem is a world-class Brazilian company, leader in the thermoplastics segment in Latin America and among the five largest Brazilian privately-owned industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and it has a yearly production of 5.0 million tons of petrochemical products. -------------------------------------------------------------------------------- For additional information, please contact: Vasco Barcellos Jose Marcos Treiger Luiz Henrique Valverde Investor Relations Investor Relations Investor Relations Tel: (5511) 3443 9178 Tel: (5511) 3443 9529 Tel: (5511) 3443 9744 Fax: (55 11) 3443 9532 Fax: (55 11) 3443 9532 Fax: (5511) 3443-9532 E-mail: vasco.barcellos@braskem.com.br E-mail: jm.treiger@braskem.com.br E-mail: luiz.valverde@braskem.com.br
Forward-Looking Statement Disclaimer for U.S. Securities Law Purposes This press release contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Braskem and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the risks and uncertainties set forth from time to time in Braskem's reports filed with the United States Securities and Exchange Commission. Although Braskem believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to Braskem's management, Braskem cannot guarantee future results or events. Braskem expressly disclaims a duty to update any of the forward-looking statement. -------------------------------------------------------------------------------- - 11 - ATTACHMENT I Braskem S.A. (Consolidated) Income Statement 1 (R$ million)
Demonstrativo de Resultado 2Q03 2Q02(2) 1H03 1H02(2) Net Sales 2,155 1,468 4,447 2,697 Cost of Goods Sold (1,734) (1,184) (3,558) (2,228) Gross Profit 420 283 889 470 Selling, General and Administrative Expenses (100) (96) (176) (160) Depreciation and Amortization (39) (187) (83) (230) Other Operating Income (Expenses) 22 73 11 121 Equity Income (25) 445 (5) 361 Operating Profit (before financial items) 278 518 636 561 Net Financial Result 258 (1,024) 171 (1,241) Operating Profit (Loss) 536 (506) 807 (679) Other Non-Operating Income (Expenses) (17) 38 (18) 23 Profit (Loss) before Income Taxes 519 (469) 789 (657) Income Taxes (82) 34 (134) 50 Profit (Loss) before Minority Participation 438 (435) 655 (607) Minority Interest (100) 119 (187) 127 Net Profit (Loss) 338 (316) 468 (480) ----------------------------------------------------------------------------------------- EBITDA 405 315 855 554 EBITDA Margin 18.8% 21.5% 19.2% 20.5% - Depreciation and Amortization (101) (242) (214) (353) - Cost (63) (55) (131) (123) - Expenses (39) (187) (83) (230) -----------------------------------------------------------------------------------------
1- Excludes the effects of proportional consolidation otherwise required by CVM-247. The numbers may not sum due to the effects of rounding. 2- Pro forma income statement. -------------------------------------------------------------------------------- - 12 - ATTACHMENT II Braskem S.A. (Consolidated) Balance Sheet(1) (R$ million) ASSETS 06/30/2003 03/31/2003 --------------------------------------- ---------- ---------- Current Assets 3,192 3,765 - Cash and Banks 104 107 - Marketable Securities 413 463 - Accounts Receivable 1,017 1,278 - Inventories 1,056 1,126 - Taxes to be Recovered 321 470 - Prepaid Expenses 56 77 - Other 225 243 ---------------------------------------------------------------------------- Long Term Assets 1,297 1,350 ---------------------------------------------------------------------------- - Related Parties 40 33 - Compulsory Deposits 153 141 - Deferred Income Taxes 124 145 - Taxes to be Recovered 718 698 - Marketable Securities 109 126 - Other 154 207 ---------------------------------------------------------------------------- Fixed Assets 8,685 8,816 ---------------------------------------------------------------------------- - Investments 2,669 2,811 - Plant, Property and Equipment 4,514 4,557 - Deferred 1,502 1,448 ---------------------------------------------------------------------------- Total Assets 13,174 13,930 ---------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY 06/30/2003 03/31/2003 --------------------------------------- ---------- ---------- Current 4,947 5,841 ---------------------------------------------------------------------------- - Suppliers 1,562 1,946 - Short-term loans 2,084 2,415 - Advances on Export Facilities 370 384 - Salaries Payable 41 81 - Income Taxes 27 23 - Taxes Payable 171 247 - Advances from Customers 415 296 - Advances for Purchase of Credit Rights 147 164 - Others 131 284 ---------------------------------------------------------------------------- Long Term Liabilities 5,286 5,624 ---------------------------------------------------------------------------- - Related Parties 223 258 - Long-term Loans 3,878 4,388 - Taxes Payable 1,055 835 - Others 130 144 ---------------------------------------------------------------------------- Minority Interest 600 497 ---------------------------------------------------------------------------- Shareholders' Equity 2,342 1,968 ---------------------------------------------------------------------------- - Capital 1,848 1,845 - Capital Reserves 754 720 - Treasury Shares (17) (17) - Retained Earnings (Losses) (243) (580) ---------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity 13,174 13,930 ---------------------------------------------------------------------------- * Excludes the effects of proportional consolidation otherwise required by CVM-247. The numbers may not sum due to the effects of rounding. -------------------------------------------------------------------------------- - 13 -