BAK - Record Resin Prices Leaving Braskem In Great Shape

• Braskem is leveraging record resin spreads to generate impressive revenue and EBITDA across its three major operating regions, with 36%, 30%, and 62% EBITDA margins in Brazil, US/EU, and Mexico.
• Strong demand from packaging, construction, appliances, and industrial end-markets and almost no flexibility on supply could keep prices strong into 2022, though international prices will likely soften before U.S. prices.
• The influx of cash flow will give management a lot of flexibility and options with capital management, including debt reduction, capital returns to shareholders, and reinvestment in green plastic capacity.
• Between a long-term discounted cash flow and blended EV/EBITDA approach, Braskem could still have upside to the mid-$20s or beyond, but eventually, the market will price in a revision in resin prices.

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