Braskem SA (BRKM5), Latin America’s largest petrochemicals maker, said first-quarter profit fell 50 percent after costs soared and a weaker local currency boosted the value of its dollar-denominated debt.
Net income dropped to 152 million reais ($77.3 million), or 19 centavos a share, from 305 million reais, or 38 centavos a year earlier, Sao Paulo-based Braskem said in a regulatory filing today.
The cost of goods sold jumped 19 percent in the quarter to 7.6 billion reais. Increased costs compressed margins, Braskem said. Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell to 9.6 percent of net sales, from 12.4 percent a year earlier.
Braskem had a first-quarter financial loss of 104 million reais, almost double the 57 million reais loss a year earlier as the Brazilian real declined 11 percent in the 12 months through the end of the quarter.
The real was the worst performing currency among seven Latin American currencies tracked by Bloomberg in the period. Under Brazilian accounting rules, an increase in foreign debt stemming from a currency slump is booked as a loss.
Net sales climbed 11 percent to 8.23 billion reais, Braskem said.
Braskem rose 0.7 percent to 13.24 reais at 10:27 a.m. in Sao Paulo.
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