(Recasts with outlook from conference call, updates share move,
adds background on Mexican operations, bribery probe)
By Alberto Alerigi
SAO PAULO May 15 Braskem SA, Latin
America's largest petrochemical company, on Monday gave a mixed
2017 forecast after its first-quarter profit more than doubled
on a growing Mexican operation and stronger demand from
Brazilian builders and carmakers.
Braskem executives said on a call they expected operating
profit in Brazil to drop over the next nine months due to weaker
prices, while rising slightly in the United States and Europe.
Braskem shares erased gains following the executives'
comments after rising as much as 3.8 percent earlier in the day.
Still, Chief Executive Officer Fernando Musa said there was
room for new projects and dividend payments while keeping a lid
on debt ratios. Heavily indebted Odebrecht SA, one of Braskem's
main shareholders, has agreed to give creditors all dividends it
receives from the company, sources told Reuters.
Profit in the first quarter rose to a net 1.905 billion
reais ($610 million) from 771 million reais a year earlier,
according to unaudited results in a securities filing.
Braskem executives said they expected the audit would be
finished soon and it would not change Monday's results.
Earnings before interest, taxes, depreciation, amortization
and non-recurring items, a gauge of operating profit known as
adjusted EBITDA, rose 16 percent to 3.598 billion reais.
Analysts expected net income of 1.383 billion reais and EBITDA
of 3.501 billion reais, according to a Thomson Reuters I/B/E/S
Global spreads between the petrochemical prices and the cost
of Braskem's raw materials were returning to normal after an
"absolutely exceptional" first quarter, the company said.
Braskem's Mexican operations also lifted earnings from a
year ago, when its plant there was ramping up production.
Industrial demand in Brazil also showed signs of picking up,
according to Musa.
"We can already see some more optimistic sectors, which is
translating into a concrete increase in volumes, especially in
the auto industry," he told journalists on a separate call.
Braskem shares are nearly flat in 2017 despite hopes of
stronger operating profits, as traders have eyed corruption
investigations circling the petrochemical firm.
Braskem agreed to fines in Brazil and the United States to
settle charges that it schemed with Odebrecht to bribe
politicians and executives in Brazil.
Mexico's state oil company Pemex said in April that
prosecutors asked to see contracts between Pemex, Odebrecht and
Braskem as part of a bribery probe.
Musa said an internal investigation found no signs of
wrongdoing outside Brazil.
($1 = 3.12 reais)
(Reporting by Alberto Alerigi Jr.; Additional reporting by
Bruno Federowski and Gabriela Mello; Writing by Brad Haynes and
Bruno Federowski; Editing by Christian Plumb, Paul Simao and