EM LATAM CREDIT: Braskem: Q2 2025 Results – Very weak
BRASKM; Ba3/BBneg/BB
We view the results from Braskem as very weak and credit negative and wouldn’t be surprised with rating actions following these results.
Gross revenues were -5% vs Q125 at $3.15bn and recurring EBITDA was significantly lower -66% vs Q125 at $74mn. Geographically all regions contributed to a weak quarter, with no region showing any resilience to the weaker pricing backdrop: Geographically:
- US and EU: Top line was -10% QoQ, while margins remain very thin, with gross margin of only 1% resulting in EBITDA loss of -$8mn vs $20mn profit in Q125.
- Brazil/ South America: Utilisation stable at 74%, revenues were -1% vs Q125 while recurring EBITDA was -24% vs Q1 25 at $152mn.
- Mexico Utilisation down to 44% in Q2 25 down from 79% in Q1 25, volumes were 16% vs Q125 and recurring EBITDA was -$9mn vs $31mn in Q125.
- Weaker recurring EBITDA resulted in weak cash flow generation. For the quarter the company consumed R$1.05bn, resulting in leverage increasing significantly to 10.98x from 7.98x.
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OUTLOOK: Price Signal Summary - Monitoring Support In GBPUSD
- In FX, the trend condition in EURUSD is unchanged, signals remain bullish and the latest pullback appears corrective. MA studies are in a bull-mode position, this continues to highlight a dominant medium-term uptrend. Note that corrections have been shallow. This also reinforces the trend condition. A resumption of gains would signal scope for a climb to 1.1851, the Sep 10 2021 high. Key short-term support to watch lies at 1.1637, the 20-day EMA.
- A bull cycle in GBPUSD remains in play and recent weakness appears corrective. Support to watch is 1.3602, the 20-day EMA (pierced). A clear break of it would signal scope for a deeper correction towards the 50-day EMA at 1.3468. Key resistance and the bull trigger is at 1.3789, the Jul 1 high. Clearance of this hurdle would resume the uptrend. Note that MA studies are in a bull-mode position, suggesting the M/T uptrend is intact.
- USDJPY traded higher Monday. The recovery has resulted in a breach of the 50-day EMA, at 144.95, and the daily close above the EMA highlights a stronger reversal. 146.19, the Jun 24 high, has been pierced. An extension would open 146.77 next, the 76.4% retracement of the Jun 23 - Jul 1 bear leg. Note that moving average studies are in a bear-mode position, signalling a dominant medium-term downtrend. First support to watch lies at 144.23, the Jun 7 low.
SONIA: Ratio Put vs Call
SFIZ5 96.15p x2 vs 96.50c x1, sold the Call at -2.75 in 4k.
EQUITIES: Large outright Commerzbank Put Option
- CBK (18/12/26) 24p, bought for 3.75 in 20k.
As a side note, more interestingly there's a HUGE 472.4k worth of OI in the 20p, of the same expiry.
