Braskem (BAK) Q3 2026 earnings review
Braskem sells more plastic, but its debt carries default ratings
Braskem, the biggest plastic resin maker in the Americas, won Brazilian customers while its whole debt load turned short-term. Its Ebitda, profit before interest, tax and depreciation, reached US$382 million, more than double a year ago. That was still 63% below the second quarter, because the gap between plastic prices and raw-material costs returned to pre-war levels.
| Ebitda, excluding one-offs | US$382M US$150M a year ago; US$1,043M last quarter |
|---|---|
| Net result for shareholders | Loss of US$206M profit of US$664M last quarter |
| Braskem loans and bonds due within a year | R$52.4B R$9.1B in June |
| 2026 investment plan | Raised US$31M now US$496M |
⚖️ Verdict: 🔴 Bearish
The story got worse because both rating agencies now grade Braskem in default, and the company books almost all its debt as due within a year. The good news: Braskem won market share at home, and its Mexican plant ran closer to capacity.
The question now is how Braskem will reorganise about US$10 billion of net debt. Lenders could swap debt for shares, or Petrobras and a new owner could put in fresh money. The terms of the plan will settle it, and Braskem has not given a date.
🐂 Bull Case
Braskem Took Market Share in Brazilian Plastics
Braskem makes resins, the plastic pellets that factories turn into packaging and pipes. This quarter it pursued a "commercial strategy focused on expanding market share in priority segments". Brazilian demand for resins barely moved from a year ago, so its extra tonnes came from rivals or importers.
- Resin sales in Brazil: 854,000 tonnes, up 12% from last quarter
- Share of Brazilian resin demand: 51%, against 47% a year ago, by our math
- Ebitda of the Brazil business: up 30% from a year ago
The added volume softened the fall in plastic prices and released R$475 million of cash from inventories. But the Brazil unit kept only 9% of its sales as Ebitda, its profit before interest, tax and depreciation.
What to watch: Braskem's share of Brazilian demand in the fourth-quarter report. A share that holds near 51% would show the resin maker won lasting customers rather than just clearing its own stock.
The Mexican Plant Ran Much Closer to Capacity
Braskem Idesa, the group's plastics complex in Mexico, now imports ethane, its gas raw material, through a terminal that opened last year. The plant ran at 62% of capacity, against 43% last quarter. It sold 34,000 more tonnes of polyethylene, the most common plastic, than in the second quarter.
The extra tonnes barely reached profit, because the gap between the polyethylene price and the ethane cost shrank 35% from last quarter. Ebitda of the Mexican unit, its profit before interest, tax and depreciation, came to just US$2 million. Its debt still stands at 11.7 times yearly Ebitda.
What to watch: the Mexican utilisation rate in the fourth quarter, after the seasonal restocking by customers ends. A rate that stays above 60% would show the terminal has fixed the raw-material shortage that held the plant back for years.
Positives this quarter didn't test
Braskem's quarterly release gave no new figures on four plans that its executives promoted on earlier calls, so none of them moved this quarter and each still waits for a first number.
- Transforma Rio, a project to make plastic from natural gas in Rio de Janeiro: signed funding and a Petrobras gas contract would move it.
- PRESIQ, a government programme that cuts taxes on raw materials: a figure for its 2026 benefit would move it.
- The resilience plan of more than 700 cost-saving steps: a savings total for 2026 would move it.
- Transforma Alagoas, a switch to cheaper imported raw material for PVC plastic: a margin figure for PVC would move it.
🐻 Bear Case
Braskem Now Books All Its Debt as Short-Term
Braskem ended 2025 with debt near 15 times its yearly Ebitda, its profit before interest, tax and depreciation. Investor relations director Rosana Avolio named the reorganisation of that debt as the group's first priority for 2026. S&P has graded Braskem in default since June, and Fitch since August.
The balance sheet changed in the third quarter. Braskem moved almost all its loans and bonds into the line for debt due within a year. It also paid only a small part of the interest its accounts recorded. The release does not explain either change.
- Loans and bonds due within a year: R$52.4 billion, against R$9.1 billion in June
- Interest paid: R$109 million, against R$1.28 billion of interest expense
- Shareholders' equity: minus R$14.2 billion
Braskem reports that net debt fell to 6.4 times Ebitda, from 16.2 times a year ago. But that ratio uses the last twelve months, which include the war-driven second quarter. Prices have since fallen back, so the ratio will climb unless profit recovers.
What to watch: the debt plan that Avolio named the top priority. Its terms will show how much debt lenders convert or forgive, and what shareholders keep.
Petrobras Credit Supplied Most of the Quarter's Cash
Braskem said its operations generated R$2.2 billion of cash, mainly from working capital: the money tied up in stock, unpaid bills and customer debts. Petrobras, Brazil's state oil company, supplies much of the plastic maker's raw material.
The largest single source was a "trade credit limit for the acquisition of feedstocks supplied by Petrobras", worth about R$1.6 billion. In effect Braskem paid its main supplier later. Without that credit, cash before debt payments would have reached only about R$350 million, by our math.
Low interest payments also lifted cash this quarter. Neither source can last, because supplier credit has a ceiling and unpaid interest keeps building up on the balance sheet.
What to watch: the fourth-quarter cash flow, and whether Braskem repays or renews the Petrobras credit. A repayment would hand back most of this quarter's cash gain.
Plant-Based Plastic Plant Ran Below Half Capacity
Braskem makes green polyethylene, a plastic made from ethanol instead of oil, and sells it as a lower-carbon product. Investor relations director Rosana Avolio listed growing this green range among the group's six priorities for 2026.
- Green ethylene plant: 47% of capacity, against 66% last quarter
- Green polyethylene sales: 31,000 tonnes, down about 30% from a year ago
- Revenue from green products: US$180 million, up 3% from a year ago
Revenue held up because Braskem sold more higher-value grades, the company said. But the plant ran below half capacity, so its fixed costs fell on fewer tonnes. The release gives no reason for the lower output.
What to watch: the green plant's utilisation rate in the fourth quarter. A rate back above 60% would show the third-quarter dip was a pause rather than weaker demand for green plastic.
Risks this quarter didn't answer
Several risks that executives discussed on earlier calls got no new numbers in this release, so each stays open until Braskem discloses more.
- Braskem Idesa in Mexico: Fitch rates it in default, and the release gives no update on talks with its lenders.
- Alagoas, the Maceió area where ground sank near Braskem's old salt mines: a court accepted federal prosecutors' charges in June.
- Control of the company: the release says nothing on the sale of Novonor's stake, which still awaited US approval in the last update.
- Import protection: the release gives no update on Braskem's appeal against the government's refusal of anti-dumping duties.
- Demand at home: Brazilian resin demand stayed flat from a year ago, so the market itself has not recovered yet.
👓 Other Themes
Plastic Price Gaps Returned to Pre-War Levels
Braskem said "the expectation of a resolution of the conflict in the Middle East" pushed down oil-based raw material prices. Plastic prices dropped faster, so the spread, the gap between the two, shrank. Its resin spread fell 42% from last quarter, while the European polypropylene spread reached just US$18 a tonne.
Braskem Launched a Plant Maintenance Programme
Braskem launched Operational Excellence 360°, a programme to prioritise the "integrity, reliability and revitalization of Braskem's global operating assets". The programme lifted this year's investment plan. It is a plan, not a result, so any effect on plant reliability will only show in later quarters.
💲 Other KPIs
The Alagoas provision, money Braskem set aside for damage around its old salt mines in Maceió, kept shrinking as payments continued. It stood at R$3.2 billion, from R$3.5 billion at the start of the year. Payments slowed to R$173 million this quarter. By our math, about R$1.1 billion remains under the state deal, mostly payable after 2030.
Money customers owe Braskem rose to R$4.7 billion, up 11% from June. Revenue fell 10% over the same quarter, and the release gives no reason for the gap. The higher balance tied up cash just as supplier credit freed it elsewhere.
Braskem's share count stayed at 797 million, excluding shares it holds itself. The group has bought back no shares and paid no dividends this year, so each owner's stake has not moved while the debt plan is pending.
Overhead, the cost of running the group, reached R$744 million, up 27% from a year ago. That outpaced revenue, which grew 13% in reais. Spending held near last quarter's level, and the release does not explain the increase from a year ago.
🔮 Guidance
Raised. Braskem now plans to invest US$496 million this year, US$31 million more than before, to fund its new maintenance programme. By our math, that leaves about US$194 million for the fourth quarter. That is 55% above the third quarter, so spending on plant upkeep picks up as the year ends.
New. The Mexican unit plans to spend US$42 million this year, mainly on maintaining and running its complex. By our math, about US$29 million remains for the fourth quarter, against US$6 million in the third. The plan leaves little room for growth projects while Fitch rates the unit in default.
❓ Key Questions
Why did Braskem pay so little interest this quarter?
Interest paid shrank to R$109 million, against R$1.28 billion of interest expense. Readers need to know whether Braskem has stopped paying some lenders, and how that shapes the debt talks.
When will Braskem present its debt reorganisation plan?
Executives named the plan their first priority for 2026, and both rating agencies grade the company in default. Its terms will decide how much of the business shareholders keep.
Will Petrobras renew its supplier credit to Braskem?
A Petrobras trade credit supplied most of the quarter's cash. If Braskem has to repay it soon, the cash gain reverses in the fourth quarter.
Is Braskem Idesa heading for a court-supervised restructuring?
Fitch rates the Mexican unit in default, and all its loans now sit in short-term liabilities. Executives declined earlier this year to discuss a US bankruptcy filing.
Where does the sale of Novonor's controlling stake stand?
The release says nothing on the change of control, which awaited US approval in the last update. A new controlling shareholder could shape the terms of the debt plan.