Q2 2025 Braskem SA Earnings Call

Thomas RASK M CEO, Mr. Felipe <unk> rescue CFO and MS Rosanna, Avolio Investor Relations strategic planning and corporate market intelligence director.

We inform you that this event is being recorded.

The presentation will be held in Portuguese with simultaneous translation into English all participants can choose which language to listen to and see the presentation in using the show captions and view options buttons as well as the interpretation button.

After <unk> remarks.

First we will announce in English.

The event will be held in Portuguese will simultaneous translation into English all participants can choose which language to listen to and see the presentation and using the interpretation and view options buttons, respectively. After brass comes remarks, there will be a Q&A session at that time.

I'm further instructions will be given.

After braskem his remarks, there will be a question and answer session at that time further instructions will be given.

This events audio will be available on the Investor Relations website. After it concludes.

We remind you that participants may choose what language, but what may submit questions to breast cams.

Bored at which will be answered by the Investor Relations Department.

Before proceeding we'd like to clarify that any statements that may be made during this conference call regarding <unk> business prospects projections operational and financial goals constitute beliefs and assumptions of the company's management as well as information currently available to Braskem <unk>.

Future considerations are not a guarantee of performance and involve risks uncertainties and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur.

Investors and analysts should understand that general conditions industry conditions and other operational factors may affect brass camps future results and may lead to results that differ materially from those expressed in such future conditions.

Now I'll turn the conference over to MS. <unk>, <unk> Investor Relations strategic planning and corporate market intelligence director.

Mr. <unk> you may begin your presentation.

Good morning, ladies and gentlemen, we appreciate everyone for participating in Brascan earnings call for the second quarter of 2020 five.

According to the agenda on slide number three with let's start with the main companies highlights in the period.

Which can be found from slide number four.

In the second quarter of 2825.

The performance of the industry continues to be affected by the continuation of the downturn in the petrochemical industry. In addition to the global tariff uncertainties.

In this scenario the utilization ratio of petrochemical plants remained stable in relation to the previous quarter, especially in Brazil, and the Fas in the United States and Europe, both with 74% of utilization, while Mexico impacted by the general maintenance shutdown showed a drop off.

35 percentage points in its utilization rate.

When compared to the previous quarter.

In addition, Brascan recorded an average global accident frequency rate of one point 11 events per million hours worked.

Welcome to Brass cams, second quarter of 2025 results conference call.

Well below the global industry average, which bring forces the non negotiable commitment to the safety of the company's operations.

Regarding the results the company reported a consolidated recurring EBITDA of $74 million, 67% lower when compared to the first quarter of 'twenty 'twenty five in face of a challenging conjunct truth scenario. In addition.

With us here. Today we have Mr. Roberto Ramos. Rasam CEO, Mr. Philippe. Jens CFO and Miss Rosanna avalo, investor relations, strategic planning and corporate Market, intelligence director.

We inform you that this event is being recorded.

Despite the lower working capital consumption when compared to the previous quarter. The company presented operating cash consumption of $31 million, an increase of $129 million compared to the previous quarter regarding its debt profile. The company ended the quarter with.

The presentation will be held in Portuguese with simultaneous translation into English. All participants can choose which language to listen to and see the presentation in using the show captions and view options buttons as well as the interpretation button.

After brass cams remarks.

First, we will announce in English.

And average debt maturity of about nine years and with more than 68% of the maturity of 2030.

<unk> cash position at the end of the second quarter was approximately one 7 billion sufficient to cover debt to maturity in the next 30 months.

Not considering the international revolving credit line of available in the full amount of $1 billion and maturing in December 2026.

Translation into English, the event will be held in Portuguese will simultaneous translation into English. All participants can choose which language to listen to and see the presentation in using the interpretation and view options buttons, respectively. After brass comes remarks, there will be a q and a session at that time. Further instructions will be given

After brass cams remarks, there will be a question and answer session at that time. Further instructions will be given

The company's total liquidity, including this line ended at approximately $2 $8 billion million dollars in the quarter.

this event's audio will be available on the investor relations website, after it concludes

Now, let's move onto the next slide.

The performance of each segment of the company will be presented below starting with Brazil on slide six.

We remind you that participants may choose what language. What may submit questions to Brass cams, uh, board, which will be answered by the investor Relations Department.

The petrochemical plants in the Brazil segment presented an average utilization rate in line with the first quarter of 2025 with emphasis on the guest base plant in Rio de Janeiro, which operated at 95% regarding sales the volume of resin soda.

Before proceeding, we'd like to clarify that any statements that may be made during this conference call regarding breast, cams business, prospects, projections operational, and financial goals, constitute beliefs, and assumptions of the company's management, as well as information currently available to Brass cam.

The Brazilian market and in the international markets were higher compared to the previous quarter impacted by the anticipation of purchases in the transformation chain due to the lower prices in the international markets in the quarter due to tariff uncertainties and the market's expectation of price increases through.

Future considerations are not a guarantee of performance and involve risks uncertainties and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur.

While the second half of 'twenty 'twenty five.

As for the international spreads that impacted the segment.

Although the average resin spreads increased in the quarter due to the 17% increase in the pp spread the lower P E spread at 4% had an influence on the result of the business.

Analysts should understand that general conditions, industry conditions, and other operational factors may affect Braskem's future results and may lead to results that differ materially from those expressed in such future conditions.

Now, I'll turn the conference over to miss Rosanna Volo, investor relations, strategic, planning, and corporate Market intelligence director.

As the volume, you may begin your presentation.

Recurring EBITDA for the segment was $152 million, 24% lower than the previous quarter, mainly impacted by the stock effect of feedstock acquired in the previous periods.

Good morning, ladies and gentlemen.

Earnings call for the second quarter of 2025.

The appreciation of the average real against the average dollar in the period.

The increased in fixed cost as cost and other expenses, resulting from the reclassification of expenses from the corporate units to the business due to changes in the company's organizational structure now let's move on to the next slide please.

Into the agenda on slide number 3, we will start with the main companies highlights in the period which can be found from the slide number 4.

In the second quarter of 2025.

The performance of the industry continued to be affected by the continuation of the downturn in the petrochemical industry. In addition to the global tariffs uncertainties,

And the second quarter of 2025, the utilization rate of the Green ethylene plant with 71% 16 percentage points lower than in the previous quarter impacted by the inventory optimization carried out in the period on the other hand sales of Green polyethylene were high.

In this scenario, the utilization rate of petrochemical plants remains stable in relation to the previous quarter, especially in Brazil and the Assets in the United States and Europe. Both with 74% of utilization while Mexico impacted by the general maintenance shutdown, showed a drop.

Due to the increase in demand from new and existing customers with emphasis on the higher volume sold in Brazil compared to the previous quarter.

Of 35 percentage points in its utilization rate.

When compared to the previous quarter.

In this context, the green polyethylene business was 18% higher in revenue in conjunction with the company's E T B E business.

The positive quarterly results benefits the company's transformation journey, focusing on its migration to renewables pillar with the objective of strengthening the resilience and longevity of the business.

In addition, breast can recorded an average global accent, frequency rate of 1.11 events per million hours worked. Well, below the global industry average, which reinforces the non-negotiable commitment to the safety of the company's operations.

Regarding its results, the company reported that Consolidated, recurring evida of 74 million.

Currently the presence of its own and innovative ecosystem focused on developing renewable solutions and the strategic partnerships established through cystinuria and Braskem see them support the advancement of this journey.

67% lower when compared to the first quarter of 2025 in phase of a challenging conjunctural scenario.

In addition.

Now, let's move on to next slide please.

In the United States and Europe segment, the plant utilization rates remained in line with the second quarter of 2025 compared to the previous quarter at 74% of utilization on the other hand, the volume of Pizza sales in the segment was higher than in the previous quarter by seven.

despite the lower working capital consumption when compared to the previous quarter, the company presented operating cash, consumption of 31 million and increase of 129 million compared to the previous quarter regarding its debt profile, the company ended the quarter with an average that maturity of about 9 years and with more than 68% of the maturity, as of 2030

<unk> thousand tons.

Despite the higher volumes.

As volumes the segment's recurring EBITA was negative by $8 million, mainly impacted by the following inventory effects due to the average cost of goods sold referring to the feedstocks acquired in previous periods, which partially offset the improvement in spreads in the segment.

Breast cancer cash position at the end of the second quarter was approximately 1.7 billion dollars. Sufficient to cover debt maturity in the next 30 months.

And the higher S G and they explained by the reclassification of expenses from the Corpus unit to the business due to changes in their companies are good innovation of structure.

Not considering the international revolving credit line available in the full amount of dollars and maturing in December 2026. The companies total liquidity including this line ended at approximately 2.8 billion dollars million dollars in the quarter.

Now moving onto the next slide we will discuss the segment Mexico in June the general maintenance shut down of breast can be de as a plant began which significantly impacted the segment's operation in the period that operated at a utilization rate of 44% and.

Now let's move on to the next Slide. The performance of each segment of the company will be presented below, starting with Brazil on slide 6.

The second quarter of 2025.

The volume of polyethylene sales in the period was also lower compared to the first quarter of the year impacted by the lower availability of product due to the scheduled shutdown.

And also the lower supply of ethane by Pemex impacting the inventory formation process prior to the general maintenance shutdown.

In this scenario the segment's recurring abduh end of period was negative by $9 million.

The petrochemical plans in the Brazil segment presented, an average utilization rate in line with the first quarter of 2025 with emphasis on the gas based plant in Rio de Janeiro, which operated at 95% regarding sales, the volume of resin. So in the Brazilian market and in the international market were higher compared to the previous quarter impacted by the anticipation of purchases in the transformation chain due to the lower prices and the international markets in the quarter due to tariff and certainties and the Market's expectation of price increases throughout the second half of 2025.

So impacted by the low where spreads have attained baseball the ethylene in the period at about $95 per ton by the higher expenses of the storage and ethane tankage due to the scheduled shutdown, which was partially offset by the positive impact on other revenue.

As for the international spreads, that impacted the segment, although the average resin spreads increased in the quarter, due to the 17% increase in the pp spread, the lower PE spread at 4% had an influence on the result of the business.

Now next slide.

In the second quarter of 2025, the Mexico segment performance was impacted by a combination of significant factors the reduced domestic ethane supply in recent months below the volume contracted with Pemex has opposed an additional operational challenge, especially in a context of.

Recording Aida for the segment was 152 million 24%, lower than the previous quarter, mainly impacted by the stock effect of fit stock acquired in the previous periods.

A downturn in the global petrochemical cycle, where international spreads or is that expected to win remained challenged in the short and in the medium terms. This.

These factors have exerted additional fresh pressure on Braskem eat desert results, which operates with a significant debt structure imposing constraints that require continued attention to cash preservation and financial discipline. In this segment now next slide.

The average Dollar in the period And The increased in fixed cost is cost and other expenses resulting from the reclassification of expenses from the corporate unit to the business due to changes in the company's organizational structure. Now, let's move on to the next slide, please.

Moving on to the next chapter I will discuss the consolidated results.

Results of the company, starting with an update regarding the work fronts in Alagoas bye.

By the end of June 2025, all work fronts in Marseille continues to advance according to plan.

In the second quarter of 2025, the utilization rate of the green ethylene plant was 71% 16 percentage points lower than in the previous quarter impacted by the inventory. Optimization carried out in the period. On the other hand sales of green, polyethylene were higher due to the increase in demand from new and existing customers with emphasis on the higher volume sodium, in Brazil, compared to the previous quarter.

In this context.

The relocation and compensation front continue to show evolution, it's at indicators and ended the semester with 99, 9% of execution of the residents relocation program. The same percentage also applies to the number of proposals submitted for the.

The green polyethylene business was 18% higher in Revenue, in conjunction with the company's etbe business.

Financial compensation then.

Relocation support program of which about 99, 5% were accepted at nine to nine 4% were paid.

The positive quarterly results benefits, the company's transformation Journey, focusing on its migration to Renewables pillar with the objective of strengthening the resilience and longevity of the business.

In parallel the execution of the closure and the monitoring of the salt Kennedy's still being implemented after the provision of all actions if necessary that ensure that the 35 cavities reach a maintenance free state in the long term we highlight in this quarter the APA.

Currently the presence of its own Innovative ecosystem focused on developing renewable Solutions and the Strategic Partnerships established through sustaina and brazia support the advancement of this journey.

Now, let's move on to the next slide, please.

<unk> by the H and M of the confirmation of the ceiling of cavity 18 with this there are already six not really filled cavities regarding the financial provision the total provision for the Alagoas event. It was about 17.5.

In the United States and Europe. Segment the plant utilization rate, remained in line with the second quarter of 2025 compared to the previous quarter and 74% of utilization. On the other hand, the volume of pp sales in the segment, was higher than in the previous quarter by 7,000 tons.

In rails of which about 13.1 billion Reals had already been disbursed and approximately 439 million Reals had been recorded in other obligations payable.

Therefore, the total balance provisions at the end of the second quarter of 2025 was 4.7 billion barrels.

8% lower than the balance at the end of the first quarter of 2025.

Despite the higher volumes. So your volume is the segment recovery Abita was negative by 8 million dollars. Mainly impacted by the following inventory effect. Due to the average cost of goods sold referring to the FED stocks acquired in the previous periods which partially offset the Improvement in spreads in the segments and the higher sgna explained by the reclassification of expenses from the corporate unit to the business to to changes in the company's organization of structure.

Now, let's move on to the Metlife.

Now, moving on to the next slide. We'll discuss the segment Mexico.

In the second quarter of 2025, despite the greater working capital management, when compared to the previous quarter due to the resilience measures implemented the company presented the cash consumption of 175 million Reals given the results presented in the quarter.

June the general maintenance shutdown of breast cam Eda plant again which significantly impacted the segment operation in the period that operated at a utilization rate of 44% in the second quarter of 2025.

The lower recurring cash consumption when compared to the previous quarter of approximately 1 billion Reals was mainly influenced by lower semi annual interest payments on the debt securities issued in the international market by the company, which are concentrated in the first and third quarters of the.

The volume of polyethylene sales in the period was also lower compared to the first quarter of the Year, impacted by the lower availability of product, due to the schedule shutdown.

And also the lower supply of attained by pamex impacting, the inventory formation process prior to the general maintenance shutdown.

A year.

Considering the disbursements from Alagoas the company presented the cash consumption of $1 5 billion rails.

Now, let's move on to the next slide.

Braskem ended the second quarter of the year, maintaining and extending profile of its corporate debt with an average maturity of nine years and 68% of that that's concentrated as of 2030.

In this scenario, this segment, recurring app and the period was negative by 9 million dollars, also impacted by the lower in spread of the same based polyethylene in the period at about 95 dollars per ton.

Has a higher expenses of the storage and ethane tankage due to the scheduled shutdown.

Which was partially offset by the positive impact on other revenues.

now, next slide

Considering the company's liquidity level the available cash of $1.8 billion is sufficient to cover its obligations for the next 30 months without considering the available international credit line and the amount of $1 billion finally, the corporate leverage.

Food at 10, 59 times at the end of the second quarter of 2025 due to the lower lowest EBITDA in the last 12 months. Following our agenda, we will move on to the next slide.

in the second quarter of 2025 the Mexico. Segment, performance was impacted by a combination of significant factors the reduced domestic attainment. Supply in recent months below the volume, contracted with pamex has closed an additional operational challenge. Specially in a context of a downturn, in the global petrochemical cycle, where International spreads are expected to remain challenged in the short and in the medium terms,

Thus, we conclude the overview of the second quarter of 2025, and I will now comment on the company's resilience and transformation program.

The outlooks for the international petrochemical industry remains challenged in the coming years, where by 2030, China will continue making significant investments in the expansion of ethylene and propylene chain using various feedstocks.

This factors have exerted additional Express pressure on breast cam, it does results. Which operates with a significant debt structure imposing constraints that require continued attention to cash preservation and financial discipline in the segment. Now, next slide,

Moving on to the next chapter, I will discuss the consolidated.

Results of the company. Starting with the updates regarding the work fronts in alagoa.

This represents a significant increase installed capacity with more than 40, new crackers planned increasing ethylene capacity by about 100 million tons and propylene by around seven 2 million tonnes, which you wait, forcing reinforces the expectation of oversupply increased idle.

To advance according to plan.

The relocation and compensation front continued to show evolution in its indicators, and enter the semester with 99.9% of execution of the residents relocation program.

As in the sector. The average Ida rate of ethylene production without considering a rationalization of the industry already shows an upward trend and the data project a growing gap between supply and demand by the end of the decade will which will put pressure on the margins of the entire.

Percentage also applies to the number of proposals submitted for the financial compensation and re relocation support program of which about 99.5% were accepted and 99.4% were paid.

Industry next slide.

In a challenging chemical and petrochemical scenario, it's important to highlight the importance of the chemical industry for Brazil, the national chemical industry is home to the fourth largest chemical industry in the world responsible for 11% of the industrial GDP and occupy in the third position among the largest in there.

Real sectors in the country the chain generates 2 million direct and indirect jobs and is present in practically all segments of the economy from fertilizers to pharmaceuticals from personal hygiene to pesticides. In addition.

It's an important competitive advantage the production of chemical inputs in Brazil is now the cleanest in the world with carbon emissions up to 51% lower than those of the many international industries. However, despite its relevance and potential the Brazilian chemical industry faces important.

In parallel, the execution of the closure and the monitoring of the salt, cavities still be implemented after the provision of all actions if necessary, that ensure that the 35 cavities reach, a maintenance-free state in the long term. We highlight in this quarter, the approval, by the amm of the confirmation of the feeling of cavity 18 with this. There are already 6 naturally filled cavities regarding the financial provision. The total provision for the alagoas. Event was about 17.5 billion rails of which about 13.1 billion bills. Have already been disbursed and approximately 439 million rails have been recorded in other obligations space.

Able.

Structural challenges today, the industry operate with the highest level of idleness autonomous in history, reflecting the growing pressure from imports and then uncompetitive cost structure in the case of the Brazilian petrochemical company. The production based on NAFTA will continue to present, a growing gap in competitive.

Therefore the total balance Provisions at the end of the second quarter of 2025 was 4.7 billion. Riyals

8% lower than the balance at the end of the first quarter of 2025.

Now, let's move on to the next slide.

And this in relation to ethane challenging the margins for the producers who use naphtha as a feedstock now let's move on to the next slide in this context Braskem remains committed to the execution of the initiatives that out and its resilience and transformation program with a focus on.

In this second quarter of 2025 despite the greater working Capital Management. When compared to the previous quarter due to the resilience measures implemented, the company presented the cash consumption of 175 million rails, given the results presented in the quarter.

Overcoming the structural challenges of the global petrochemical industry and the national chemical sector. In this scenario. The company has been implementing initiatives aimed at sustainable value generation with an emphasis on maximizing EBITDA and generating greater cash.

The lower recurring cash consumption when compared to the previous quarter of approximately 1 billion. Reels was mainly influenced by lower semi annual interest payments on the debt securities issued in the international market, by the company, which are concentrated in the first and third quarters of the year.

Now moving onto the next slide regard to initiatives related to the defense of the Brazilian chemical industry Brascan together with Abbott King and other companies operating in the sector right forces the importance of implementing mechanisms to protect protective measure industry in order to ensure greater competitive Dallas as an example.

Considering the disbursements from alagoas, the company presented. The cash consumption of 1.5 billion rails.

Now, let's move on to the next slide.

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Breast can ended the second quarter of the Year, maintaining an extended profile of its corporate debt with an average maturity of 9 years, and 68% of the debts. Concentrated as of 20130

Bill 892, Slash 20 watt twenty-five stands out which establishes the special sustainability program for the chemical industry.

Preserving aimed at promoting their sustainability and competitiveness of the sector through fiscal incentives brascan reaffirmed its support for the approval of the project recognizing it as an essential measure to strengthen the entire production chain.

Additionally, with the proximity of the end of the special regime for the chemical industry rake scheduled for the end of 'twenty, two and ethics is urgent to adopt measures to ensure the competitiveness of the Brazilian chemical industry in the face of this structural and conduct drove challenges of this sector.

Considering the company's liquidity level, the available cash of $1.8 billion is sufficient to cover its obligations for the next 30 months, without considering the available international credit line in the amount of $1 billion. Finally, corporate leverage stood at 10.59% in the second quarter of 2025, due to the lower EBTIDA in the last 12 months. Following our agenda, we will move on to the next slide.

Thus, we conclude the overview of the second quarter of 2025, and I will now comment on the company's resilience and transformation program.

For breast came the resumption of the tax credit on the purchase of feedstocks to the level of 825% a rate originally approved in the presentation of break in 'twenty I think represents an opportunity for competitive equality, creating value for the entire chain and for the country.

Additionally, with the end of rake the proposal would be the institution of a new financial Reg them between 2020, five and 'twenty 'twenty nine with incentives for purchase of feedstocks and for the expansion of the production capacity at the same time the approval of anti dumping measures.

The outlooks for the international petrochemical industry remains challenged in the coming years where by 2030 China will continue making significant investments in the expansion of ethylene and propylene. Chains using various feed, stocks this represents a significant increase in stalled capacity with more than 40 new crackers planned increasing.

Is essential to correct market distortions and protect this domestic market, especially in the face of the growing pressure caused by the increase in imports made with their pricing practices. Several countries such as the United States, Europe, and China, and South Korea have already implemented robust.

Policies to encourage the chemical industry with trillions of dollars in subsidies support for innovation and trade defense mechanisms, although each adopts a specific strategy as they all share the same goal to strengthen the chemical industry and essential basis for several other production chains in.

In addition to generating significant quinta multiplier effects for their economies now let's move on to the next slide.

Within the transformation pillar the optimization of naphtha based assets is one of the company's objectives, aiming firstly to maximize the utilization rates of the most competitive production lines such as the one in Rio de Janeiro, which operated at 95% in the last quarter.

Is home to the fourth largest chemical industry in the world responsible for 11% of the industrial GDP and occupying the third position among the largest industrial sectors in the country, the change generates 2 million direct and indirect jobs and is present in practically all segments of the economy from fertilizers to Pharmaceuticals from personal hygiene to pesticides. In addition

Another advance was the approval of resources via rake invest tomatoes of initiatives that enable the expansion of the capacity of PVC assets in the language.

While the company is also evaluating the hibernation of the least competitive production lines globally, which considers the criteria such as plants age technology used production cost scale and operational synergies.

Aiming at a greater efficiency and profitability now, let's move on to the next slide.

In relation to this front, we will seek to enable the expansion of our guests based assets with a focus on greater competitiveness and the resilience of the business by expanding the use of a more competitive feedstock.

It's an important competitive Advantage. The production of chemical inputs in Brazil is now the cleanest in the world with carbon emissions up to 51% lower than those of the main International Industries. However despite its relevance and potential the Brazilian chemical industry faces. Important structural challenges today, the industry operates with the highest level of identity in history. Reflecting the growing pressure from Imports and an uncompetitive cost structure in the case of the Brazilian petrochemical company. The production based on NAFTA will continue to present a growing Gap. In competitiveness in relation to ethane challenging the margins for the producers who use NAFTA as a feed stock. Now, let's move on to the next slide. In this context, breast can remains committed to the execution of the initiative that out in its resilience and transformation program.

This includes project to expand gas based capacity.

The expansion of the flexibility of petrochemical plants in Brazil and initiatives that ensure the operational stability of our crackers such as the recent expansion of our own fleet dedicated to transport ethane between the United States of Brazil and Mexico.

With a focus on overcoming, the structural challenges of the global petrochemical industry and the national chemical sector. In this scenario, the company has been implementing initiatives aimed at sustainable value generation with an emphasis on maximizing a beta and generating greater cash.

As an example of an initiative to expand gas based assets is cause for my view a project to increase the capacity of the.

Capacity of the petrochemical complex in Rio de Janeiro by 230000 tonnes with equivalent expenses have been so far 233 million Reals had been approved for the contracting of conceptual and basic engineering studies. The final investment decision on the project is conditioned to the signing of a long term.

Now, moving on to the next slide regarding initiatives related, to the defense of the Brazilian chemical industry pressing together with a bikini and other companies. Operating in the sector where forces importance of implementing mechanisms to protect protected National Industry in order to ensure greater competitive balance. As an example, Bill, 89222 stands out which establishes the special sustainability program for the chemical industry.

It failed supply contract.

And the use of resources within the scope of rake investments.

In addition to promoting greater competitiveness for the company. The project has the potential to unlock important social economic benefits for the region such as increased revenue and National collection. In addition to the need for around 7500 jobs during its execution.

Physic aimed at promoting the sustainability and competitiveness of the sector through fiscal incentives. Breast can reaffirmed, its support for the approval of the project, recognizing it as an essential measure to strengthen the entire production chain.

Now, let's move on to the final slide to conclude I would like to bring forth our priorities that guide our actions in 2025, we will continue to advance in the transformation of our assets with a focus on competitiveness efficiency and sustainability.

Additionally, with the proximity of the end of the special regime for the chemical industry rake scheduled for the end of 2026, it's urgent to adopt measures to ensure the competitiveness of the Brazilian chemical industry in the face of the structural and construct challenges of the sector.

Journey is essential to ensure the resilience of our business in the face of the challenges of the sector at the same time implementing can teach NC initiatives for the petrochemical cycle with special attention to the financial preservation and cash flow flow management and sharing solidity.

And responsibility and our decisions.

We'll also continue our work in the competitiveness agenda off the Brazilian chemical industry seeking measures to promote competitive equality and strengthened the sector as a whole and finally, we will maintain our commitment to the agreement signed in Marseille fulfilling each stage with transparency.

And the responsibility all of this without giving up safe actions in our operations safety is and will continue to be a nonnegotiable value in our strategy guiding baskins every action and decision. Thus we conclude the presentation of Braskem. The result for the second quarter of 2025.

Thank you very much for everyone's attention.

We will now start the Q&A session.

Ladies and gentlemen.

We will now start the Q&A session.

To ask a question please click on raise hand button or.

Say your question using the Q&A.

Window to remove your question.

Click again on the raise hand.

And our first question comes from Gabelli Baja C. D. W. You May proceed.

Hi, everyone.

Thanks for taking my questions I have two of them.

We.

Discussed.

What about measures to improve the company's results and how to improve resiliency.

And when we look at micro numbers in spreads as you mentioned, there's a longer delay in recovery for the spreads than we had expected.

This is <unk>.

In fact, taking longer than we imagined and the companies leveraging peaked at almost three accident.

Order.

There's matters related to costs, but this is rather high leveraging in our perspective.

And this does make us a little concerned about the leverage rate in the company's bottom line.

And also on the topic of the recent interview that the company gave talking about sales of assets and bringing in a potential partner.

For a green production.

I'd like to see if Roberto or Felipe, perhaps can tell us a little bit about how you can work in a more difficult and compressed spread scenario and bring the company to a healthier portfolio you mentioned a lot about greener.

But could you also talk about other assets that may be discussed or perhaps about rationalizing capacity.

And what is the route to improve the company's leverage over the coming years. The second question I think is inevitable, but we must discuss the company's control I know it's complicated for you, but we must comment also about the recent press conference you gave with regard to Petrobras.

Yes.

Could you give us an update about how these discussions are going with annuities.

And the different investment plans and perspectives and so on.

I think you've also looked at other players as well and there.

Their proposals.

Could you give us an update a broader update about how these discussions are going it would help us to understand more about the future of the company.

In this context of the.

The divestment of <unk> over the past few years. Thank you.

Hi can you hear me alright.

Thank you thank you Gabriel.

Good afternoon, and once again.

With regard to the company's financial status in <unk>.

Fact, as you aptly put it.

A double digit leverage right.

Largely not due to doug's, but due to non fulfillment of a bitter.

As we've discussed over the half of the year and recently in the conference call. There are a number of measures that we can bring in to bring these levels to lower lower numbers.

And they are things, we look at in our strategy.

And they largely involve growing or a better way.

Have a transformation plan called fly up to green and switch to gas.

<unk> is going to significantly improve our productivity and as a result generated a bit tough for the company and consequently give us more comfortable levels when it comes to leverage.

But part of that strategy also involves as you mentioned.

Liquidity initiatives for the company that touch on.

Not just.

The measures that we've just presented.

With regard to competitive.

Standing.

Competitive quality with regard to the Brazilian petrochemical industry.

That we can remain on the growth agenda and impact positively on the EBITDA, but also as you mentioned Gabriel.

The company is not focused on selling assets to generate cash as long as there is something more important which is the transformation plan.

So assets and we've always said this Roberto has said this all of our conversations over this time assets that are not necessarily directly linked to the company's future, which is our transformation plan they may potentially be monetized in.

Part or in whole and thereby generate some cash for the company of course this in times when our liquidity is tighter this becomes more important.

But this is not a sale that is solely focused on that it's actually part of a much greater and more structured plan, which is our transformation plan and so these are parts of the transformation plan that remain tightly connected to everything we've been discussing about with you.

When it comes to a potential.

Reduction in shareholder stake in any one of these assets.

Roberto.

Yeah I'll take the second question.

Just to remind you Gabriel and classic situations like this one what we aim to do is to manage working capital as well as we can.

So we work with our suppliers to lengthen payment plans and work with clients to tighten our receivables plans.

So we have a number of different initiatives. They are all being pursued very diligently.

And it's relevant to mention that at the price level for resins today.

Levels that are imposed by the growing imports of.

<unk>.

<unk> that arrived here at levels lower than their practice in their respective countries, where they are produced.

Well this isn't imbalanced that must be corrected.

And so it depends on us to show the severity of those to the Brazilian government.

And for them to make the necessary measures.

With regard to the.

The sales of <unk> and with regard to Braskem.

It's important to remind everyone that when you have a company interested in purchasing the other.

The purchasing company.

Researchers the company Theyre interested in purchasing the due diligence process.

Now as part of the due diligence process. It is inevitable that you will have a management presentation.

The management five.

In other words, a presentation to the future purchasing companies management presenting your plans and how things are going and this is what we have done and it's what we always do whenever such a situation arises theres nothing special.

Now I always repeat this and unfortunately I cannot make my message be correctly received but we are not part of those negotiations we are not party to these meetings and discussions.

Because we.

Cannot.

Control.

The the Braskem shares that are owned by other shareholders.

That's up to the individual shareholders. The banks are the other companies I can speculate, but I mean, everyone can speculate.

Uh huh.

I know that there is a level of exclusivity that was granted.

Which I believe expires on August 20, something.

And we are waiting to see whether or not this operation or the trade will be completed and you know our our schedule are our day to day is significantly occupied by our business. So we really can't waste a lot of <unk>.

Our time mulling over this topic.

I always say this whatever shareholder comes to control Braskem. The challenges that they will encounter are the same ones. We have today and resolving those challenges involves our management our capacity to implement the necessary solutions.

So therefore wasting our internal time and energy trying to become involved in a negotiation that does not truly pertained to the company, but instead to its shareholders does not really add value it actually consumes a lot of our energy.

Potential.

Reduction in shareholder state in any 1 of these assets.

Excellent answer thank you Roberto and Philippe.

Roberto.

Our next question comes from Taco basketball families with UBS.

Yeah, I'll take the second question.

You May proceed sir.

Hi, everyone. Good afternoon. Thank you for taking my questions.

Just to remind you Gabriel in classic situations like this 1, what we aim to do is to manage working capital as well as we can.

Roberto.

On the topic of your last comment and also with the interview you gave earlier you mentioned that a new controlling shareholder could potentially revise summer of the company's plans, but where do you see greater room for these changes some kind of geography.

So we work with our suppliers to lengthen payment plans and work with clients to tighten our receivables plans.

So we have a number of different initiatives, they are all being pursued, very diligently.

James or in the company's business model or the product mix or I don't know are there other locations, where this type of change can more drastic ones can occur.

And it's relevant to mention that at the price level for resins today.

And also along those lines what impact might those changes how to the process whether that is in use our burn of our cash or in improvements to operations in the very short term.

Levels that are imposed by the growing imports of products that arrived here at levels lower than their price in their respective countries where they're produced.

Well, this is an imbalance that must be corrected.

And the second question, which is I think for Philippe.

And and so it depends on us to show the severity of this to the Brazilian government.

The company burned cash in the order of 700 million in the first half of this year. So what is your perspective or forecast for the second half of the year as the company, perhaps going to be more cash neutral closer to the end of the year or are we still going to work under a scenario where the company continues to have a little bit of cash.

And for them to make the necessary measures.

With regard to.

<unk> burn.

The sales of novenario.

And is there.

A significant improvement to spreads without the <unk>.

Governments intervention, such as Ray Kristie can antidumping for 2026 those are my questions. Thank you.

Hi, Tousle.

I mentioned that in theory.

The purchasing company researchers the company, they're interested in purchasing. That's the due diligence process. Now, as part of the due diligence process, it's inevitable that you will have a management presentation.

Or the management 5.

Any future controlling shareholder that comes to have control over the company will have the right to analyze and criticize.

The company's actions.

I am convinced that our strategy is the best strategy applied to our reality.

In other words, a presentation to the future purchasing companies and management, presenting your plans and how things are going. This is what we have done, and it's what we always do. Whenever such a situation arises, there's nothing special.

Because it focuses on neutralizing our weaknesses and maximizing our strengths.

Now, I always repeat this and unfortunately, I cannot make my message the correctly received.

So minimizing or neutralizing our weaknesses means.

Do you think consumption of naphtha as feedstock and starting to consume a more profitable feedstock.

But we are not part of those negotiations. We are not party to these meetings and discussion.

because we

And in terms of emphasizing our strength I have a Swat analysis in my head, we have to minimize weaknesses and threats and maximize strengths and opportunities and.

So in terms of maximizing strengths, that's about our migration to green.

I cannot control the brass cam shares that are owned by other shareholders; that's up to the individual shareholders, the banks, or the other companies. I can speculate, but I mean everyone can speculate.

it's

That means increasingly ramp up produce production of green products, probably ethylene, but not just polyethylene.

I know that there is a level of exclusivity that was granted.

Which I believe expires on August 20th.

And adjusting production of fossil based products.

Our success in converting the naphtha to gas basis.

I'm talking about theories of here, but in my mind in my perspective, that's the best strategy that Braskem can pursue this does not necessarily mean I am utterly correct. It could be that some potential new shareholder could wish to emphasize one area or.

And we are waiting to see whether or not this operation or the trade will be completed and you know, our, our schedule, our, our day-to-day is significantly occupied by our business. So we really can't waste a lot of our time mulling over this topic.

Or another I was talking about theories I was not talking specifically about one particular point that could be highlighted or.

I always say this, whatever shareholder comes to control brass Camp, the challenges that they will encounter are the same ones we have today and resolving those challenges, involves our management our capacity to implement the necessary Solutions.

Or down regulated.

Now with regard to financial health.

And banks investors and analysts.

Our strategy given the industry's status now I should mention that the industry constantly consumes cash for two years now that's not just braskem.

so therefore wasting our internal time and energy trying to become involved in a negotiation that does not truly pertain to the company, but instead to its shareholders does not really add value, it actually consumes a lot of our energy,

Excellent answer. Thank you. Roberto and Philippe.

Our major international competitors I won't name them.

All have significant cash consumption year after year and an increase of.

All right. Next question comes from Passover with UBS.

You may proceed sir.

Our other metrics.

They ran into some problems.

Hi everyone, good afternoon. Thank you for taking my questions.

Roberto.

And we ran into problems that they didn't occur which is pertaining to the salt mines.

And this includes the Chinese competitors, they're building 32 tons of ethylene.

And yet they're running their plants at under 70% utilization rate because they overbuilt plants and the market hasnt absorbed that much material. So we remain with our strategy.

With the awareness that it is the correct strategy and if such a time comes when a new shareholder controlling shareholder changes or our strategy and.

Calls upon us to change our Tac So we will do it.

The greater room for these changes, some kind of geography change or in the company's business model or the product mix. Or I don't know, are there other locations where this type of change can more drastic ones and occur, and also along those lines? What impact might those changes have to the process whether that is in use or burn of our cache or in improvements to operations, in this very short term.

This doesn't mean that any of these strategies are more correct than ours, what we need to do is to spend less to improve the performance of our plants and to seek out products that give us better a better and that is exactly what we're doing.

And the second question which is, I think for Felipe.

The company burned cache in the order of 700 million in the first half of this year.

Perfect and on the topic of what Roberto said.

Which is exactly the answer to your second question Tyson.

So what is your perspective or you forecast for the second half of the year is the company? Perhaps going to be more cash neutral closer to the end of the year. Or are we still going to work under a scenario where the company continues to have a little bit of cash earned?

Yes.

We should still consume some cash in the second half of the year less so than in the first half largely based on all of these measures we've been discussing announcing and really hammering on about.

And is there a significant improvement to spreads without the government's intervention, such as Rake for Seek and anti-dumping for 2026? Those are my questions. Thank you.

Hi toso.

With regards to improving productivity.

Improving initiatives to improve our feedstocks and energy inputs at these plants.

I mentioned that in theory because any future controlling shareholder that comes to have control over, the company will have the right to analyze and uh criticize.

The company's action.

And.

As we've mentioned performing other potential.

Improvement measures whether they are.

Creating our green business, improving creation of our green businesses.

Making sure that it has the necessary resources to expand.

And to ensure that all of them will create cash if not by the end of this year.

At the longest.

In the very short or medium term, so that we can deleverage improve our EBITDA and reduce our consumption of cash.

In the more immediate term.

This is a major focus of ours.

We are involved in all of these measures.

Whether that's through a V P L or economic value or liquidity.

Or different financial measures that allow the company to reduce.

The cash consumption within 2025.

Because.

Both spreads and volume forecasts.

Are not going to be very different for the second half of the year than they were in the first half of the year.

As a result, our ability to generate operating cash within the company.

It is something we're going to focus on through all of these initiatives.

Excellent. Thank you that's very clear.

Our next question comes from the St. Jeff Alan go with the Bradesco BBA you May proceed Sir.

Thank you Roberto Philippe and Rosanna, Thanks for the call I have two questions.

I'd like to understand the main takeaway that the company has sent to bondholders.

The bonds are trading under 70 at face value.

I know that there's many bonds coming to term, but most are in 2028.

For my second question I'd like to understand whether today, you see the assets that breast Cam purchased in the U S.

Such as Dow among others.

Our strategic back in 2010 and 2012.

The company really wished to increase its participation in the U S. For instance, through the Cracker project in Philadelphia and for a number of reasons that didnt occur.

So I'd like to understand how strategic these assets are within the company's strengths portfolio. Thank you.

With regard to our U S plants. They are an integral part of our strategy maintaining.

Maintaining these plants in the U S.

Is that.

Of essential importance for us.

Because that is where two of our three main laboratories are located the Pittsburgh Laboratory, which is focused on.

Technology products and catalysts for polypropylene, especially but also polyethylene.

And the Lexington Laboratory.

Which is focused on our line of green products.

Along these lines one of our projects is to produce green polypropylene in the U S based on corn ethanol.

And therefore.

The plants there are essential for us to process propylene.

Our propane the green of propylene that we would then create.

So we have no.

No doubt that these plants are essential for us.

And I'm personally not a fan of thinking about selling assets to amortize debt now with regard to the bonds.

As you mentioned as you asked.

Braskem has a conversion plan.

For gas and for Green.

That.

Involves investments.

Very large investments for instance, just one of them involves a $700 million investment so to finance that you you will find out that through our bank financing during construction, but after construction youre necessarily must migrate to long term financing to match.

The assets and.

And funding in terms of terms you can't.

<unk> mismatch short long term funding or financing so whether we.

We use.

Bank financing our own financing, we need to migrate to capitals. So any type of migration that would be done with brass comes back.

Now this would be considering that.

Braskem would need to re profile its debt.

And this would prevent us from gaining access to this capital market and this would impede us from our transformation plan and the investments we must perform.

So in terms of financial.

Technical discussions it makes no sense to re profile brass comes that Furthermore, I believe that this is a mistaken diagnosis brass comes problem is not the size of its debt, but its current a bit that it is resolved by increasing our EBITDA and we increase or better through all of these rules.

Zillions C measures and tariff and commercial protections that we aim to obtain from the government. This will increase breast cancer a bit to the levels that we had five or six years ago and as a result, our net EBITDA ratio will stop being relevant.

In 2028 brass gums, a bit the level will be much higher than it is today. So.

So for me.

In my opinion. This is a very superficial view of Braskem.

And.

It's about bringing in a medication for a wrong diagnosis and if you know finance this is not the right diagnosis.

Thank you Roberto that was very clear.

Our next question comes from Bruno Montanari with Morgan Stanley.

You May proceed sir.

Good afternoon, everyone. Thanks for taking my questions I'd like to follow up on some of the topics that were discussed.

I think the centers last question is due to a headline that was published recently that said you may be thinking of selling the U S assets, but based on your response I can see that that is not the case. So I would just like to double check whether it is totally out of the question.

And another topic along those lines.

On the topic of restructuring the portfolio and reassessing strategies. This is something we've seen discussions for some time now quite some time now.

Currently no real stretch.

Structural changes have occurred so my question is about timing.

What do you see in terms of Africa fusion for performing that transformation given that the leverage rate has reached numbers that are kind of critical and the double digit rate.

And my second question.

One we think about.

On.

The government support for the industry as a whole, which makes sense and you mentioned that various other regions have these types of incentives. However, your results in those regions, where the incentives exist were worse than here in Brazil.

as you mentioned, as you asked,

Rice Camp has a conversion plan.

For gas, and for green.

That.

Involves Investments.

So what types of additional measures would be needed in the U S Europe or Mexico for the company's results to improve.

And if I may ask a third question.

I understand that you are not party to the Nova nor negotiations, but the company's management is involved in assessing brass cams the articles.

Very large Investments. For instance just 1 of them involves a 700 million dollar investment so to finance that you you will find that through a bank financing. You can construction but after construction you necessarily must migrate to long-term financing to match the assets. And

So I'd like to ask you about tag along the Tagalong clause and one in the company's opinion would be a trigger for that to count as change of control would would it be only the total.

Uh, and funding in terms of terms, you can't uh mismatch short- and long-term funding or financing. So whether we...

The divestment of <unk> or would it be November or losing effective controlling status.

We use bank financing or our own financing; we need to migrate to capitals. So any type of migration that would be done with Braskem that...

Now, this would be considering that.

And becoming a.

Minor shareholder.

Brass cam would need to re-profile its debt.

Roberto before I start on the topic of the assets.

I I want us to be very cold coherent about everything we do and everything we discuss again everything comes down to our transformation plan that we have announced and have approved and have discussed exhaustively now by Roberto.

And.

The.

That we have discussed at length and have received strong feedback that this is the route that many many of the company's shareholders believe is the most correct way to address the challenges imposed.

By the fact that the global petrochemical industry.

Is it.

Given.

All of that.

5 or 6 weeks ago. And as a result, our net with the ratio will stop being relevant.

5 or 6 and as well our net the ratio will stop being relevant.

The existing assets, whether they are more aligned with the plan or less aligned with the plan they may.

Ways and that's not just today.

Stop being part of the company's portfolio in whole or in part.

As Roberto mentioned the question of the U S based laboratories.

These laboratories are extremely important for the company's transformation plan and so they are absolutely in line with our future.

About bringing in a medication for a wrong diagnosis and if you know, Finance, this is not the right diagnosis.

Thank you, Roberto; that was very clear.

All the measures we put in line the asset itself is without a doubt unimportant.

Our next question comes from Bruno Montanari with Morgan Stanley.

Let me proceed sir.

Relevant asset.

It <unk>.

Has that generated cash and a bit more strongly in the past and it is likely to grow again in the future. We're always going to assess them as long as that doesn't deviate us from our transformation plan as Roberto also mentioned and the company's growth so that we.

Good afternoon, everyone. Thanks for taking my questions. I'd like to follow up on some of the topics that were discussed.

We can address our leveraging.

Which was also questioned by Gabriel's first question.

I think the center is last question is due to uh headline that was published recently. That said you may be thinking of selling the US assets, but based on your response, I can see that that is not the case. So I just like to double check whether it is totally out of the question.

So it's important for us to be clear about this topic.

And another topic along those lines.

Everything results from our transformation plan.

And things that are within or outside of the plan may be.

More or less susceptible to potential monetization be they partial or total depending on the assets we are discussing specifically.

Occurred. So my question is about timing.

With regard to the transformation.

What do you see in terms of execution for performing that transformation? Given that the leverage rate has reached?

Actually many many steps are being taken.

Numbers that are kind of critical in the double-digit rate.

And my second question.

We're not just a.

Discussing them for instance in Rio de Janeiro, we have transformed Mario it's.

when we think about,

It's one of the largest investments that has ever been announced in the Brazilian petrochemical industry. It is extremely relevant and it's one of the key components of our transformation plan. It is in full.

Full steam.

The 233 million a real plan, it's a ah for.

4 billion real investment, there's a team with dozens upon dozens of people involved along with Petrobras working specifically on this topic too.

The government's support for the industry as a whole makes sense. You mentioned that various other regions have these types of incentives. However, your results in those regions where the incentives exist were worse than here in Brazil. So, what types of additional measures would be?

Make sure that all the expenses are accounted for.

Including rake expenses every month. So this is a project that is in full motion.

But the company's management is involved in assessing breast, CAMs, articles.

As well as our Green project as we've mentioned.

It's currently at a reasonably advanced phase.

We are looking at.

Potential interested parties.

So, I'd like to ask you about the tagalong clause and what, in the company's opinion, would be a trigger for that to count. As kings of control, would it be only the total divestment of an overarching entity, or would it be an overall losing effective controlling status?

Parties, who may be interested in a share of our green company.

And becoming a uh, minor shareholder.

Which will be here and have gone to the full and by year.

As well as Thailand.

Uh, Roberto before I start on the topic of the assets.

This is a process that as you well know generally takes several months or more than a year to be completed we began in late 2024.

At full steam on the first half of the year. These.

I I want us to be very uh coherent about everything we do and everything we discuss. Again everything comes down to our transformation plan that we have announced and have approved and have discussed. Exhaustively, Now by Roberto.

Players are engaging in their due diligence for these assets. So it is they are dedicated and the project is moving along very very significantly.

and,

The.

There is also the topic of Alagoas as we've discussed here. This agenda has been exhaustively discussed and worked on with various different stakeholders, whether they're public or private.

That we have, uh, discussed at length and have received strong feedback that this is the route that many, many of the company's shareholders believe is the most correct way to address the challenges imposed.

by the fact that the global petrochemical industry is in

Class associations, all aiming to improve productivity of our PVC plant and as a result.

Given.

All of that.

Optimize our feedstocks.

The existing assets, whether they are more aligned with the plan or less aligned with the plan, may always have some degree of alignment, and that's not just today.

Which provide the necessary material for that plant to produce.

Stop being part of the company's portfolio in whole or in part.

There is also an 88 million real investment in that plant.

As Roberto mentioned, the question of the U.S.-based laboratories.

To improve its productivity there are actually two major projects that were approved.

Both for new technologies and for producing PVC itself 15000 tons.

The laboratories are extremely important for the company's transformation plan, and they are absolutely in line with our future.

We have over 30000 tons of PVC coming in and all of that makes the set of these plants, which had been suffering because of their technology and age as well the age of some of their components, especially the.

And all the measures we've put in line. The asset itself is, without a doubt, an important,

a relevant asset.

It.

The provision of our feedstocks, which now make that plant.

This is actually very recent news.

Have a completely different profile than what occurred during the first half of the year.

Has generated cash and a bit more strongly in the past, and it is likely to grow again in the future. We're always going to assess them as long as that doesn't deviate us from our transformation plan, as Roberto also mentioned in the company's growth, so that we can address our leveraging.

Which was also questioned by Gabriel's first question.

Actually I would say that this has concluded.

These measures are now complete within our transformation plan and lastly, before I pass the floor back to Roberto.

So, it's important for us to be clear about this topic: everything results from our transformation plan.

The question you asked about whether or not there is a tagalong.

This is a highly legal question as you mentioned there is a clear definition and the company's articles works is open for anyone who wants to read and interpret what is written there.

And things that are within or outside of the plan may be, uh, more or less susceptible to potential monetization, be they partial or total, depending on the assets we are discussing specifically.

With regard to the transformation.

Actually.

With regard to what does or does not trigger a tagalong clause.

And as Roberto also mentioned.

Many, many steps are being taken. We're not just, uh, discussing them. For instance, in Rio de Janeiro, we have to transform Mario.

We are not currently spending our time to analyze that because if and when that occurs annually was forward and those proposals are.

Officially submitted the banks that hold them <unk> as well with regard to any proposals that may come to be made.

It's one of the largest investments that has ever been announced in the Brazilian petrochemical industry. It is extremely relevant, and it's one of the key components of our transformation plan. It is in full steam.

With regard to the Novo no shares.

Then at that time, if and when that occurs we will discuss that but again. This is a highly legal discussion which of course will at some point need to be defined but.

Billion. Real investment. There's a team with dozens upon dozens of people involved, along with Petra, working specifically on this topic to, uh, make sure that all the expenses are accounted for.

On our part this is not something we are provoking or a defining roberto.

Including rake expenses every month. So this is

I will answer the other questions.

On the topic of the results from the U S, Germany and Mexico.

reasonably Advanced phase.

Mexico has our best results by far.

They're a bit is much higher than the a better at our other plants because it's a much more modern site, it's thermal and energy profile is much more efficient.

We are looking at potential interested parties.

Parties. Who may be interested in a share of our green company?

Which will be here in regard to the soul and VA.

They suffer from lack of feedstock because our feedstock supplier consistently fails to provide us the necessary levels of feedstocks. So we had to invest in a terminal to import ethylene from the U S.

As well as Thailand.

This is a process that, as you well know, generally takes several months or more than a year to be completed. We began in late 2024.

With the end as I mentioned last week with the end of the halt and the beginning of investment in the plants. We are now going to start operating at a level of capacity level that really owns up to that complex.

at Full Steam on the first half of the Year these

Players are engaging in their due diligence for these assets.

And you'll see that the EBITDA margin is many times higher than what we have in Brazil.

So it's it they are dedicated and the project is moving along very very significantly.

With regard to Brazil.

Our polypropylene plant in the U S and Germany are not integrated.

That means we buy propylene from suppliers.

The price of propylene has fluctuated.

Because we can purchase.

There's also the topic of alagoas as we've discussed here. This agenda has been exhaustively, discussed and worked on with various different stakeholders whether they're public private, uh, class associations, all aiming to improve productivity of our PVC plant. And as a result

Polymer grade or refinery grade propylene.

Optimize our feed stocks.

In the past there was a spread between these two types of propylene, we capitalized on that spread.

Which provide the necessary material for that plant to produce.

To buy the cheapest.

One for us and this arbitrage.

There's also an 88 million real investment in that plant.

Was somewhat reduced but what we saw in the U S. In the first semester was atypical these plants have given us $1 billion per year in cash flow. So the news from this journalist who is very well informed when it comes to breast kind of I don't know what his sources are.

To improve its productivity, the are actually 2 major projects that were approved.

Both for new technologies and for producing PVC itself, 15,000 tons.

$1 billion.

From the U S plants, that's something we had every year.

So you're talking about a whole other level of value.

And in Germany, our two plants in Germany suffer from.

From the same problems at all of European petrochemical industry suffers the cost of energy in Germany tripled.

We have over 30,000, tons of PVC coming in and all of that makes the set of these plants which had been suffering because of their technology and age as well. The age of some of their components, especially the provision of feed stocks which now make that plant,

This is actually very recent news.

When it when it comes to the end of using Russian gas and moving to U S gas.

Uh, we have a completely different profile than what occurred during the first half of the year.

Actually, I would say that this has concluded.

Then the value tripled.

Per btu, so the cost of energy.

It reflects that.

As a result, we're aligning our supply contracts for those plants. So that we can gain access to less expensive propylene.

These measures are now complete within our transformation plan. Lastly, before I pass the floor back to Roberto.

The question you asked about whether or not there is, uh, Tagalong.

But there is a crisis in the petrochemical industry in Germany, and Europe, as a whole and in Germany in particular.

The the billiard table has all the billiard balls in motion so we're working to recover.

This is a highly legal question. As you mentioned, there is a clear definition in the company's articles, which is open for anyone who wants to read and interpret what is written there?

With regard to what does or does not trigger a tagalong clause.

Everything that we can.

And as Roberto also mentioned,

Alright next question comes from Nicholas for music.

You May proceed sir.

we are not currently spending our time to analyze that because if and when that occurs and moves forward, and those proposals are

Officially submitted the banks that hold them? Novenario.

Okay.

Our next question comes from Leonardo match cones is with Bank of America. Your line is open Sir.

With regard to the noveno shares. Then at that time if and when that occurs, we will discuss that. But again, this is a highly legal discussion which of course, will at some point need to be defined but

Hi, Hello can you hear me.

On our part. This is not something. We are provoking or defining Roberto.

Okay. Good afternoon, everyone Roberto Philippe Rosanna.

I will answer the other questions.

Thanks for taking my questions I have two questions as well.

First I'd like to ask.

On the topic of the results from the US, Germany and Mexico.

How you see the capacity closure dynamics in the short medium and long term, let's say 25 and 26.

Mexico has our best results by far.

And within that context, I'd also like to understand if you have any forecast with regard to the time evolution topic that has arisen in China, and how that could impact capacity closures in the short term.

More.

My second question pertains to the value leveraging and whether that could help the petrochemical industry in Brazil.

Efficient, they suffer from a lack of feedstock because our feedstock supplier consistently fails to provide us with the necessary levels of feedstocks. So, we had to invest in a terminal to import ethylene from the U.S.

I'd like to get your opinion.

About the timing or these measures do you think that antidumping as something that might be discussed in the next yes sex meeting.

With the end, as I mentioned last week, of the Halt and the beginning of investment in the plants, we are now going to start operating at a level, a capacity level that really owns up to that complex.

And you will see that the bit, the margin is many times higher than what we have in Brazil.

Or.

Or any other meetings.

Including urgent ones with.

With regard to timing how do you see the timing for these measures. Thank you.

With regard to Brazil, our polypropylene plants in the US and Germany are not integrated. So that means we buy propylene from suppliers.

The price of propylene, has fluctuated.

Philippe Let me answer the first part of your question.

Because we can purchase.

Then you and Resona can answer the others.

Unfortunately this is the last question I will need I will be able to field because I I suddenly have a commitment I am already late too.

Polymer grade, ore Refinery grade propylene in the past. There was a spread between these 2 types of propylene, we capitalized on that spread.

Leonardo something that's very clear for us at Braskem is.

That all of our production plans, we have 40 different plants around the world all of them must generate positive cash flow if they fail to generate positive cash flow.

To buy the cheapest 1 for us and this Arbitrage was somewhat reduced. But what we saw in the US, the first semester was a typical. These plants have given us 1. So the news from this journalist who is very well, informed

Then those sites will be submitted to some kind of intervention, whether that means replacing feedstocks from NAFTA to gas or naphtha gas blend.

When it comes to breast cam, I don't know what his sources are 1 billion dollars.

From the U.S. plants, that's something we had every year.

Or some other kind of feedstock such as non ethane.

So, we're talking about a whole other level of value.

She was the case with plant two in Rio Grande do Sul, which we plan to run with propane.

And in Germany, our 2 plants and Germany suffer.

And the plants that fail to adjust so all of these interventions, we can make to improve productivity well they have no reason to exist.

from the same problems that all of European petrochemical industry, suffers the cost of energy and Germany, tripled

And so we will hibernate or shut down plants that generate negative EBITDA. After all of the corrective measures. We can undertake but of course this needs to be done in an orderly manner.

when it, when it comes to uh, the end of using Russian gas and moving to us gas

The the value tripled.

Per BTU. So the cost of energy

Uh, reflects that.

And with regard to the previous question.

You don't shut down a plant overnight you have business commitments you need to uphold you have employees you need to reassign.

As a result, we are aligning our supply contracts for those plants so that we can gain access to less expensive property.

You have commitments you have signed.

But there's a crisis in the petrochemical industry in Germany, in Europe as a whole, and in Germany in particular.

Two.

The different.

Contracts you need to comply with.

You don't implement a decision like this overnight.

The, uh, the bill, your table has all the billiard balls in motion. So we are working to recover.

Everything that we can.

We are constantly analyzing all of our assets and I assure you that those assets that cannot return to generating positive cash will be shut down in time.

All right. Next question comes from Nicholas Fabio.

You may proceed sir.

Thank you that's clear, but my question was more on the topic of what you see in the industry, because there's low capacity to close not braskem, but the industry as a whole.

Our next question comes from Leonardo. Morones with Bank of America, your line is open sir.

And I'm wondering if you've seen anything different or if you have any different expectations with regard to the more mainstream consulting services that people generally follow.

Hi. Hello. Can you hear me?

And in that sense, if you have any kind of perspective about the time evolution matter in China, which was really a hot topic over the past couple of weeks.

Okay, good afternoon, everyone.

Thanks for taking my questions. I have two questions as well.

First, I'd like to ask.

With regard to China I'm sure you saw that the Chinese government opened a process to define it.

How do you see the capacity closure dynamics in the short, medium, and long term? Let's say 2025 and 2026.

What petrochemical plants will be removed from operation the Chinese model is about building a.

The electric fence as they call, which determines the need for a given product in the petrochemical industry polyethylene and polypropylene.

And within that context, I'd also like to understand if you have any forecasts with regard to the time, Evolution topic that has arisen in China, and how that could impact capacity closures in the short term.

And then they allow the various actors whether they are private or public.

My second question, pertains to the value leveraging and whether that could help the petrochemical industry in Brazil.

Federal municipalities to build their plants, they provide credits and tax subsidies those plants are built.

I'd like to get your opinion.

The production capacity comes online at the same time and then they engage in an internal destruction process.

About the timing of these measures? Do you think that anti-dumping is something that might be discussed in the next, uh, yes, next meeting?

Or.

Uh, or any other meetings.

It's.

Including urgent ones.

It's a destructive type of capitalism is applied in China and after the.

Thank you.

After after everything is on the table than the government decides what remains this was done on a.

Philippe. Let me answer the first part of your question.

Then you and Rosanna can answer the others.

The lead up to the Beijing Olympics.

This process is occurring more slowly than we imagine one of the things we expected.

Unfortunately, this is the last question, I will need, I will be able to field because I I sadly, I have a commitment. I am already late to

We hoped.

Leonardo something that's very clear for us at Brass, cam is

Or better prices. This year is we expected this process, especially in Europe would occur more quickly. It did not occur more quickly because the governments that each of those countries or regions try to prevent plants from being shut down so they start granting subsidies here.

That covers all of our production plans. We have 40 different plans around the world, and all of them must generate positive cash flow. If they fail to generate positive cash flow, ...

We're in there and different easements, along that process and as a result, they change the different price signals.

Then those sites will be submitted to some kind of intervention, whether that means replacing feedstocks from NAFTA to gas or a NAFTA gas blend.

They've changed the optimal allocation of capital and so plants that shouldn't continue to run well remain online.

Or some other kind of feedstock, such as non-ethane, which is the case with Plant 2, in regard to the ES which we plan to run with propane.

That's I'm, sorry, I do need to apologize again, thank you all for being here, but I leave you in the very capable hands of Philippians Rosanna.

And the plants that fail to adjust to all of these interventions we can make to improve productivity, well, they have no reason to exist.

<unk>.

In reverse order no I'm, just going to add something now you're right that we have been following this movement.

People mention.

Capacities that used to be there.

And so we will hibernate or shut down plants that generate negative Abita after all of the corrective measures we can undertake. Of course, this needs to be done in an orderly manner.

But on the other hand, there is a willingness of China to meet the demands of its internal requirements. So that they are less dependent on the rest of the world and when we look at their capacities that are going to be included in China. This was also in the prisons.

And with regard to the previous question,

You don't shut down a plant overnight. You have business commitments. You need to uphold. You have employees. You need to reassign.

you have commitments, you have signed

And we made in relation to the capacities, we see there's a large campus capacity of <unk> P. M. P. P. Maybe the foundation of a P. P may be more positive for the years to come when compare to P/e because this health sufficient movement by China started.

To the different, uh, contracts, you need to comply with.

You don't implement the decision like this overnight.

Before so.

We are constantly analyzing all of our assets and I assure you that those assets that cannot return to generating positive cash.

So if you look into the future we see that time is likely to reduce its new capacity of P. P for the next years.

Will be shut down in time.

The other hand, polyethylene, which stands at 70% of self sufficiency, we understand that this is going to affect the capacity and you asked about the consulting firms we have contact with the specific consultants from the sector and what we do is what.

Thank you, that's clear. But my question was more on the topic of what you see in the industry. Because there's low capacity to close, not Braskem, but the industry as a whole.

To have a potential rationalization of the world It's.

And exercise when we consider the base case.

And I'm wondering if you've seen anything different or if you have any different expectations with regard to the more mainstream consulting services that people generally follow.

And we assume.

Which would be the decision of another entity to close it down and unit.

And in that sense, if you have any kind of prospective about the time Evolution matter in China, which was really a Hot Topic over the past couple of weeks.

But we have it can see either other aspects such as contracts they have with their suppliers. So it's difficult to understand where the other is going to be so we have been following up.

With regard to China, I'm sure you saw that the Chinese government opened a process to define.

The risks and Utilizations are going to be especially major competitors, but as you said they do not move at the speed that we expected if we compare for example, with the financial crisis.

What petrochemical plants will be removed from operation. The Chinese model is about building a

Uh, electric fence as they call which determines the need for a given product in the petrochemical industry, polyethylene and polypropylene.

For different reasons, but in a way they also impact the supply and demand are rationale when we look at the environment. When it was better in relation to the impact of the financial crisis, we saw that 27 of the.

And then they allow the various actors, whether they are private or public, uh, Federal municipalities to build their plants, they provide credits and tax subsidies. Those plants are built.

Of the industry closed so it takes a while so we have been monitoring of what 10 has been doing we have the rationalization model that we adopt and we understand that those who are likely should the shut down and those whose technology was owed which is not our case.

The production capacity comes online all at the same time, and then they engage in an internal destruction process.

It's uh,

It's a destructive type of capitalism as it is applied in China, and after the uh,

But China has been put in the market a lot of capacity as I mentioned the rest of the world.

That.

After after everything is on the table, then the government decides, what remains this was done on. Uh,

For them, we do not see a lot of changes. He then we do not see that to their game.

The lead up to the Beijing Olympics.

Let's see the announcements of new capacities, so that I believe that when China reaches this sufficient level, where we're likely to have a better balance of the spreads.

This process is occurring more slowly than we imagined. One of the things we expected was that we hoped...

But here over here, we have been observing some change some improvement.

It's different co to understand where their rationalization is going to be and we believe that this is going to take about two or three years and there's also.

The point of Antidumping, Yes, antidumping and Rick Let me tell you a story of anti dumping process. In fact first providing a context today, we'll have a context, which is the most competitive feedstock.

And as a result, they changed the different price signals.

Global level without any doubt it if they are in relation to the price of the molecule and also its conversion from ethane to ethylene.

They changed the optimal allocation of capital and so plants that shouldn't continue to run uh, remain online. That's I'm sorry, I do need to apologize again. Thank you all for being here but I leave you in the very capable hands of Philippe and Rosanna

Thank you.

And also the cash cost base based on Europe. So it's competitive in cost is very large.

Roberto, hello. And just going to add something. Well, you're right; we have been following this movement.

People mention.

Capacities that used to be there.

Especially when we consider all of the agenda that we have in relation to the industry protection synthesis weapons, Zurf C and let's get a reference at an average price.

So the international reference of the product that is produced in the United States and soda in the United States, It's from 300 or $500 higher than the price of experts.

But on the other hand, there is a willingness of China to meet the demands of its internal requirements, so that they are less dependent on the rest of the world. And when we look at the capacities that are going to be included in China, this was, uh, also in the presentation we made in relation to the capacities, we see there's a large cap capacity of PE and PP.

And this is where we see the damage we are talking about.

Exports are up.

The import of 900 of $1000. So from the technical viewpoint as a company really believes that the legal arguments for the N damping to be approved is underway and there are two important moments to consider this investigation process started in November.

Maybe the foundation of PP may be more positive for the years to come when compared to PE because of this self-sufficient movement by China. I started before.

'twenty 'twenty four and following the Lego right. It will end up to May next year.

And considering all the points of that I shared beforehand, and as we see the preliminary report. Unfortunately, we do not have any expectation of when this is going to become public. So we're going to look for this anticipated approval. Unfortunately, we do not have a spill.

So, if we look into the future, we see, the time is like to reduce its new capacity of pp for the next years at the other hand polyethylene, which stands at 70% of self-sufficiency, we understand that this is going to affect the capacity and you asked about the consulting firms. We have contact with the specific Consultants from the sector and what we do is what uh to have a potential rationalization of the world. It's uh, an exercise when we consider the base case,

After deadline, but its important to mention that antidumping is a very technical agenda and we really believe that this is going to be approved I don't know if it's going to the anticipated, but it has it has enough.

Technical argument and we're also talking about the production chain as a whole, which does not involve one nebraska, but all of the chemical industry, which is an industry that has been hurt to enhanced by many actions.

And we assume that it would be the decision of another entity to close down a unit. We have considered other aspects, such as contracts they have with the suppliers. So it's difficult to understand what the other party is going to do. We have been following up on what the Russians are going to do, especially major competitors. But, as you said, they do not move at the speed that we expected. If we compare, for example, with the financial crisis.

Actions coming from China also.

Affecting the profitability of the industry. So the industry as a whole has been working.

Hard to move forward together with the keen and other players of the Brazilian industry.

4, different reasons, but in a way, they also impact the supply and demand the rationale, when we look at the environment, when it was better in relation to the impacts of the financial crisis, we saw that 27 of the, uh,

And.

Unfortunately, there is no deadline for this to be approved.

But it can ensure is that baskin advocating and the industry at large have been focusing so that this can be approved as soon as possible. This is one of the main focus of the company and of the industry as a whole.

Of the uh, industry closed. So, it takes a while. So we have been monitoring, what China has been doing, we have the rationalization model that we adopt, and we understand that those who are likely to shut, shut down. Are those who is the technology was owed, which is not our case. But China has been putting in the market, a lot of capacity, as I mentioned, the rest of the world,

Thank you that's very clear thanks for the answers. Thank you ma'am.

That.

Our next question comes from Jose Almeida with Santander Rodrigo you May proceed.

Good afternoon, everyone.

I have just a few follow up questions.

First with regard to Green co.

For them, we do not see a lot of changes. Even we do not see that they're going. We do not see the announcement of new capacities so that I believe that when China reaches this, uh, self-sufficient level, we are going. We are likely to have a better balance of the spreads.

Let's I want to ask about sources and uses.

But, year over year, we have been observing some changes and some improvement.

And the Green co what do we expect will be involved we mentioned, Thailand and Brazil. This is the large.

It's difficult to understand what the rationalization is going to be. We believe that this is going to take about 2 to 3 years and there's also.

There's a large.

Biomedicine project in the U S. It's not clear for me whether that would be included in Greene co.

the point of anti-dumping.

And if there are any other additional investments maybe in by year end.

Any green ethylene.

Plans to include that in Greencore.

My aim is to understand the essentially the size of the green co. So that we can see how much of that equity would be valued at that you're that you aim to raise.

And the second part of my question pertains to the investments that you intend to make in Brazil.

Particularly the logistics investments and by year.

And rake, let me tell you a story of the anti-dumping process. In fact, first providing a context today, we have a context, which is the most competitive feedstock at a global level. Without any doubt, it is ethane, in relation to the price of the molecule and also its conversion from the same to ethylene, and also the cash cost based on Europe. So, it's competitive and the cost is very large.

Is there a reasonable volume of 101 hundred $80 million I think it's something around that level and if you are making similar investments in Brazil as you made in Mexico.

What they deserve see. Uh, let's get a reference, an average price.

Or logistics investments in Brazil could you give us some context about.

Investments about importing propane for who's going to default.

And just to conclude.

This may be difficult to answer now, but it's worth a try.

So the international reference of the product that is produced in the United States. And so, in the United States, it's from 300 or 500 higher than the price of exports.

At Braskem ADESA are there any plans or studies to expand the plant given that you have now completed the terminal.

And this is where we see the damage. We are talking about, uh,

Since it's isolated.

Do you have any plans at the moment. Thank you.

Alright. Thank you Rodrigo for your questions with regard to <unk> you have a great map you've outlined those are the main assets that are currently presented as potential assets to be part of green coke, including the by year project, which you mentioned so.

Yes.

And remember again.

We are currently in a time of discussions we don't yet have final decisions. This is going to start being better defined.

As we start closing the loop.

The plant the window and receive more proposals from interested parties. So that we can price them qualify them and really quantify everything.

And determine what is included and what is not.

This is just a topic to be discussed the matter of S. A F.

Which used to be considered.

Well it is green, but it's not part of Green co at the moment, it's a little different.

But.

It is just I'm mentioning it just to mention that there are still discussions to be had we have not yet hit the hammer on anything yet.

Much less put it to the board.

For for approval.

With regards to logistics.

Yes, we are going to request some logistics investments in Brazil to.

To implement the transformation plan that Roberto mentions.

Or are importing ethane and propane are in Brazil.

And.

As we see that develop.

At the moment, we don't yet have any definitions.

Creating a terminal is a possibility as we did in Mexico, but it is not.

At videos is not Ah.

It's not a certainty.

At all at the moment.

So.

We don't yet know whether it would justify.

Creating a logistics company.

But this is part of our list of initiatives you are correct that it is part of our transformation plan and the aircraft that we are looking at the best way to make the best possible use of our structures to implement these assets.

And lastly.

Today at Braskem ADESA are installed capacity there is.

1.050 million for the first time, it's going to be able to run when the the terminal enters.

It is going to run at full operation for the first time.

We're now moving to 1.2 million tons.

This is.

It is being discussed at the moment.

We are not yet.

<unk>.

Certain about the right timing.

But when the plant when we see how the plant operates when its at full swing.

And.

The matter of the global petrochemical industries, and spreads and volumes and all of those external questions external to braskem and external to the petrochemical industry as well.

We need to look at all of that in order to make these decisions. So I would say that.

Your answer is we don't yet have a definitive answer.

If you if I could add something related to the transformation point.

There are some considerations I would like to make but yet is it red flexible it already has this flexibility.

Yeah, right. So the investment was it.

In the order of $100 million. So we can have the option of purchasing ethane and we have been exercising this possibility.

And then later, but less than the past because the price of oil dropped and therefore naphtha price. So we already have this flexible as Asian in place. So it's it's dense for about 15 or 20% of what we process in terms of ethane.

So we can create value we can attract value of something that we have implemented in 2017.

We are used.

Using this flexibility.

In relation to the south even though the plants that we have in the thousand regions. They are very <unk>.

Older, but we understand that they can run propane or.

So we understand their investment is going to be lower because of different from the 100.

Dollars that we invested in the past.

We understand that but you can run propane so the investment will be lower so future auto studies are still underway that if he wanted to convert into a thing that we would not need to make the calculations to see how much of the investment would come to that in fact, we can extract value are related to the flexibility something that.

That was planned beforehand in the past.

And as to the plant expansion and what's important for us to look at that we have never tested the plant 100%.

But it's important to understand that we can optimize the plant. So that it can run above 1.050 million times without any investments and the additional investments. So this is going to be our total focus so the plant can produce how much so the airport's terminal already considers.

Quebec.

Capacity of imports of 80000 barrels per day, which is much higher than the capacity that we need so any expansion would be something to be discussed in the future.

That would also include the need for higher capital and as we mentioned in the call we talked about Mexico.

And.

The stability when we work with Mexican product. So this is our total focus how we can operate to the planned without additional capex and improve their effectiveness.

Excellent. Thank you thank you Hassan and Felipe.

Our next question comes from Louise It's got value with BTG you May proceed Sir.

Hi, everyone. Thanks for taking my question.

Given the current time I will ask just one question.

Philippe.

To recap everything that was asked during this call and all your answers.

I am currently.

Rather more concerned about the timings and motions of everything that has been raised here because when we look at the spread dynamic that you yourselves.

Publish or and it consultants and the slow times in reducing capacity in other countries, the cash burn and the debt level.

And we are discussing the transformation process.

I become very concerned because at the end of the day two years from now we may be discussing I will disagree with what Roberto said, we may be discussing re profiling the debt two years from now so I'm wondering at what point in time do you believe that this button will arm.

They need to be pressed in order for us to make more drastic decisions in order to keep the company's sustainable because if we compare 25 and 26 with the current scenario. The company is going to reach 27 very close to the 28 term with a much worse.

That leverage.

<unk> level, so at what time do you believe that.

You know given the rake for Zika and antidumping.

Do you, perhaps consider accelerating the process a new article was published from another journalist about the same topic about potentially selling the plants in the U S. So at what point would that sense of urgency yet raise among the management in order to make more drastic changes about that.

Questions.

All right Luis.

In fact.

Your question involves a number of different variables.

And many of which we control.

And many others of which we do not control such as the exact date when the antidumping will be published or the increase in rake.

Or the size.

Those have important impact on the company.

And we manage all of that and draft scenarios about when which scenarios may occur.

So this is all to give you an analogy, it's like playing billiards, but the balls never stop moving.

So I don't have a precise tactical.

Answer I can give you right now.

But we know that.

I can tell you this is something.

We do we consider many different scenarios internally so that.

If one of those more severe liquidity.

Scenarios comes up on the Horizon, we will be able to make a decision ahead of time as Roberto mentioned this is not our current scenario. This is not what we predict will occur but it may occur unexpected tariffs.

The country is invading other countries and other events that fall completely outside of our control. So we need to be prepared for the use of the scenarios.

Many times they do have an impact on the company.

What I can tell you is that we are very alert to this agenda. This is not a secondary topic in our priorities on the contrary.

Both among the management and among the board.

We discuss.

Possible strategies and possible measures to be implemented.

In order to address any potential situations that may arise.

Many of which we've discussed during this call.

In order to effectively implement those strategies.

And I just saw what you mentioned here on the on our global her partner.

Who has just published about this.

Again, this corroborate what we said earlier.

Namely.

And what I affirm to you right now.

We are in fact looking at this agenda, making the necessary measures.

But it's important to always take a step back look at the macro concept, we have a campus.

Which is our transformation plan I again say this was approved by the board the administrative council by everyone.

In attendance it was tested by numerous stakeholders many of whom are our bank finances, such as you and other consultancies and other bondholders and stakeholders and they have all confirmed you have all confirmed that this is the <unk>.

Route for us to follow there's nothing to add or remove from the plan. We are pursuing today, which is liquidity measures and.

Economic valuation measures and the very very short short medium and long terms.

So we are significantly focused on this agenda.

And.

Every time, there is a potential for liquidity within this period as you mentioned 26 to 28, which is when we start seeing substantial results.

Because the results are occurring at this exact moment results of the transformation agenda re assigning some less efficient plants changing our feedstocks.

And this puts an end to the cash burn, which we had in the past to start being cash positive. This is occurring at this exact moment.

We have to use medium to long term measures as well starting to generate results and while that curves we implement other measures as well as potential total and partial monetization.

But.

It's important to make something clear.

And too strongly establish Louise the our plan remains nothing has changed.

And increasingly what we see is the sense of urgency that it must be implemented without deviating from the three pillars, which are resiliency.

The quality of the petrochemical.

Industry has switched to gas fly up to green and we are not deviating a single inch within that strategy you.

Using that sense of urgency so that we never need to come to that scenario that you mentioned now.

And we will only discover what happens in the future.

If things occur or don't occur at the speed and intensity that we're scheduling, but we do expect things to occur at the speed and intensity that we forecast, but you're right. We may potentially need to accelerate some additional measures within the transformation plan in order to prevent dv.

The Asians from it so that we can prevent any of those events that you predicted.

Thank you that's very clear.

That the closer it comes.

Then the the more unfavorable the company becomes should a potential deviation occur. Thank you.

Our next question comes from Quahog, though.

With safran.

You May proceed.

Hi, good afternoon, everyone.

I'll try to be very to the point here.

Because of time.

My question is about the real Paul expansion plans.

What is Petrobras involvement in the discussion for those investments do you think it's coming up soon.

You mentioned that it's a key component of the final decision.

For providing feedstocks there.

And Petrobras has numerous times mentioned they want to make investments in the old compares unique region for petrochemicals do you see any interest for breast cam or rake to get involved in producing chemicals that are not resins.

Heska had to think of rise very much further question in relation to the expansion of he'll probably mirror, let me provide you with an.

For prospect.

Today here Paul.

Since it started up in 2016 it is is.

Propane and ethane as feedstock. So the company is always going to try to use a more.

In order to make polyethylene and this would be the best horse. In addition to the more competitive and fits our bras.

There's expansion process of heel Breo Paul It has it wears two hats one at the board and this is what we communicated and we made it a point to reinforce today.

In relation to the approval of the investment.

Any.

Investment higher than 100 million vials has to be approved by the board. So we took information to the board about is.

Steady phase so we're talking about 130 millions of which were approved by the board. We do not have the final approval for the investment. We believe that this is a project that is going to create value to the company is the only full.

Gas based plants that we have for the company.

And at the right moment.

We're going to take care of it for the approval of <unk> by the board and what is the proper moment any petrochemical project with.

Without any doubt at start of within contract I'll feedstocks feedstock is essential for any project to continue because this is the main input and the most important input yes.

Considering the other half of that better boss, where we have been discussing a new contract. So that we can use the attain that Petrobras has informed me that it has more of availability with the beginning of a route three all of those discussions are underway we are confident.

In the context of synergy it makes a lot of sense because ethane has a limitation that it has considering the hit power that it has it has a lot of synergy for both companies. So this is something that has been going on.

And.

We are going to make it public.

In due time.

And the current agreement that that would have is with Petrobras and this is a very important here because we're not only going to discuss a new contract, which is going to be so important for the <unk>.

A presentation of the transformation strategy.

But also to the renewal of the agreements that we have executed. So these are the two roles that Petrobras has one at the board with a decision and the other is related to the feedstock. So that the product can become feasible and the second point, which is very important today of.

Of course, we're still making the detail engineering and coming to the final Capex. There's an estimate of about $100 million, which is an initial estimate and of course, it's very important information that.

When I mentioned about the right investments and preserve the in this true.

And the industry wants to build the industry of the future using the green SNL et cetera. So the approval represent not only addresses preserve coverage in relation to feedstock and when we talk about competitiveness, but we also have to touch upon investment so what has.

We have been searching we and other sectors as well.

We are seeking for the approval of <unk>. So we support the full approval authorization considering the competitive mez at Brexit and also for the future. So we are like we are going to use all the resources of <unk> investments in order to implement a rape.

For the implementation of the expansion of helpfully put upon pulling out of the 230 million Boe.

Rails that have already been approved by the board.

They use together with a rake investments.

And the last question about compares any decision of new investments is related to allocation of capital by the company and it has to be compliant with the corporate strategy of the company, which is fully clear it's clear where the company wants to go. So if we have this compliance if we have this idea here.

Adherence the comedy will evaluate at all times and we understand what's the best allocation of capital in terms of Oh I. So this is the corporate decision will have to make.

Should we have any chemical related project at the brands can we say that it's a petrochemical company, but it's a chemical and petrochemical company. If we talk about revenues, 20% of the revenue comes from the chemical products that we produce in Brazil.

So this is where we would look at so.

Return of the capital employed and compliance with the strategy, which is so clear that we've made.

Clear at the beginning of the year.

Thank you that was very clear thank you Hassan.

Our next question comes from hedges Cardoso with XP.

Please proceed sir.

Hi, good afternoon, everyone.

Thanks for the very detailed discussion.

I want to ask about the results of the SK particular.

And with regard to the inventory turnover would that effect to be reverted in Q3.

Due to the naphtha used and with.

Working cash.

Would you expect a greater use due to the drop in price.

With regard to the composition of the inventory.

My question is mostly about whether Q3 and inventory and working cash is is going to cause any changes.

That's one question. The second is why is the utilization rate for Green P E lower.

I understand that we discussed prioritization of Green co in particular, so I believe that that part of the assets would have higher utilization and if you'll allow me a quick third question.

For eliminating a bit the consolidated we had a very negative number in the quarter is there something that is important for us to understand there for the next quarter. Thank you.

Hi, Rajeev. Thank you good afternoon with regard to inventory turnover you may have seen that in Q1. The companies. The company had cash consumption because of scheduled shutdowns due to our strategy.

And price provisions, we had built up inventory so that inventory improved with the reduction in Q2.

And that's the impact we see specifically in Q2 25, not as a strategy for Q3, but really as a result of Q1 and now for Q3, it's going to be more in line with normal operating numbers for the company.

With regard to utilization rates for green products.

I have seen in Horizontals presentation at the beginning of the call. There was a composition of inventory in the Rio Grande do Sul in Q1, as a result utilization rate in the South was 82%, 87% as a result inventory was produced.

And so utilization rate dropped to 71% and you'll see that sales volumes of P. E in Q1.

Jumped from 38 to 48000 tonnes in Q2, thereby consuming that inventory and as a result, reducing the utilization rate.

With regard to the negative impact.

Hosanna.

The stock effect that you mentioned.

And in relation to the first quarter to the second quarter and the contribution margin.

In the current operational right.

The 50% is imported best.

Baskin made this change of importing more NAFTA.

Especially when there was a change of the output of Petrobras refineries, we needed to make that shift and mainly point the NAFTA from the moment, we purchased NAFTA at the moment, it's in and the stock as finished product. It has the turnover in four months. So he observed there was a larger drop off.

The oil price, especially between March and April and as a consequence of not the naphtha price and the price was much lower about 50.

50, 50, 50, $550 and the NAFTA was a more expensive at that time. So if we can see that abduct bridge beef between those periods. There's about 130 <unk> hundred $50 million of contribution margin. This is a difference and this effect of the.

Inventory effect is there it happened, especially in Brazil.

And there was something.

In this regard that happened in the United States. So in if you observe the other quarter the second quarter.

If you look at expectation and if we also consider the opinion of consulting companies, we understand that the oil price is going to be at $70 per barrel and this crack spread that is likely to be maintained and then.

Regular levels that would come to have 150 or 570.

For NAFTA and we're not likely to see this positive inventory effect.

According to your question and lastly in relation to elimination.

Without any doubt we already part of the uptick from Pradesh production, because they are based and the values in different ways and and this is related to the change that we made in 2015 and 2016 so what.

What is material and it's important to mention is how we see production and this is.

What we do we have an accounting movement of CPC 47.

That happened and this has not affected the client yet and there was another factor that we try to explain along the release related to the business. We had some changes in the organizational structure of the company.

So all of the fixed cost of the corporate unit.

Is.

Cortez after I report to the segment Ebitdas and because of this change.

Now for Q3, it's going to be more in line with normal operating numbers for the company.

And the organizational structure of the company.

So that would amount to about $40 million. So this was a different way of making the calculation from the historical viewpoint.

We can see variation in the values, but if you consider modules.

With regard to utilization rates for green products, you may have seen in Rosana Avolio's presentation. In the beginning of the call, there was a composition of inventory in the Rio Grande to the soul in Q1.

You can see that this is very aligned to what we have seen a along the quarters and this has to do with the neurologic that production and we won.

Did that because we do not want to make major adjustments engine managerial aspects.

As a result utilization rate in the South was 82% 87%. As a result, inventory was produced. And so utilization rate dropped to 71% and you'll see that sales volumes of PE in q1.

Thank you Richard.

This concludes today's question and answer session.

Jump from 38 to 48,000 tons in Q2, thereby consuming inventory. As a result, this reduces the utilization rate.

This concludes our <unk>.

With regard to the negative impact.

Our Q a question and answer session.

Hosana.

Ross Candies video conference call has now concluded have a great afternoon.

The stock effect that you mentioned.

In relation to the first quarter and the second quarter, and the contribution margin.

In the current operational rates, uh, 50% is important, but can we make this change of importing more NAFTA?

Especially when there was a change of the output of petrobras, refineries we needed to make that shift and when we important after from the moment we purchased and after the moment it's in in the stock as finished product, it has the turnover in 4 months. So you observe there was a large drop of the oil price, especially between March and April and as a consequence of NATO NAFTA, price and the price was much lower about 50. 50 50 50 uh 550 and NAFTA was a more expensive at the time. So if we consider that at the bridge be between those periods, there's about 130 or 150 million dollars of contribution margin. This is the difference and this effect of the inventory affect is. There it happened especially in Brazil

And there was something.

In this regard, that happened in the United States. So, if you observe the quarter, the second quarter.

If you look at the expectation, and if we also consider the opinion of consulting companies, we understand that the oil price is likely going to be at $70 per barrel. Additionally, this crack spread is expected to be maintained at regular levels, which would come to 550 or 570.

For NAFTA, we are not likely to see this positive inventory effect according to your question, and lastly, in relation to elimination.

Without any doubts, we report the Optics from production because they are based and their values in different ways. And and this is related to the change that we made in 2015 and 2016. So what what, what is material list important to mention is how we see production and this is what we do. We have an accounting movement of CC 47.

That happened, and this has not affected the client yet. There was another defect that we tried to explain along with the release related to the business. We had some changes in the organizational structure of the company.

So, all the fixed costs of the corporate unit.

is reported after I report to the segment evidence, and because of this change.

In the organizational structure of the company, that would amount to about $40 million. This was a different way of making the calculation from the historical viewpoint.

We can see variation in the values, but if you consider modules.

You can see that this is very aligned to what we have seen along the quarters. This has to do with the new logic of production. We did that because we do not want to make major adjustments to the managerial aspects.

Thank you, rich.

This concludes today's question-and-answer session.

This concludes our

Our Q&A question and answer session.

Breast cancer's video conference call is now concluded. Have a great afternoon.