Now I'll turn the conference over to Guilherme Mélega, IRO and Corporate Controlling Officer. Mr. Mélega, you may begin your conference.Guilherme A. Mélega Good afternoon, ladies and gentlemen. Thank you for participating in yet another Braskem earnings conference call. Today, we'll be commenting on our results for the second quarter and first half of 2012. First, we would like to remind you that pursuant to Federal Law 11638 from 2007, the results presented in today's presentation reflect the adoption of International Financial Reporting Standards, or IFRS. Note also that as of the second quarter, the company began to recognize investments in jointly controlled companies using the equity method and no longer base it on proportionate consolidation. In addition, unless stated otherwise, for the periods presented, Braskem's consolidated results reflect: the proportional consolidation of Refinaria de Petróleo Rio-Grandense, or RPR, until Q1 2012; the full consolidation of Cetrel as of the second quarter of 2011 retroactive to January 2011; and as of the fourth quarter of 2011, the polypropylene business acquired from Dow Chemical. Information in today's presentation was reviewed by the independent external auditors. Let's go to the next slide, where we will begin our comments. Slide 3 presents Braskem's highlights in the period in the quarter marked by continued deceleration in the global economy, which was adversely affected by Europe's sovereign debt crisis and the slowdown in China's economy. Braskem was able to operate its crackers at a high utilization rate, which averaged 88%. Brazilian demand for thermoplastic resins, however, weakened by 9%. Meanwhile, Braskem maintained its strategy based on expanding the local market, growing its domestic market share by 3 percentage points to 71%. Braskem's net revenue in the quarter was BRL 9.2 billion or 11% higher than in the previous quarter, driven by the appreciation in the U.S. dollar in the period. EBITDA was BRL 845 million, growing by 7% sequentially. Excluding the nonrecurring effects of BRL 108 million resulting from the prepayment of installments under the tax amnesty program and the adjustment on the compensation paid by Sunoco, EBITDA was BRL 737 million or 34% higher than recurring EBITDA in the first quarter of BRL 551 million. In US dollars, EBITDA in the quarter was $430 million.
In line with its strategy to add value to its existing streams, Braskem began operations at its PVC and butadiene plants, which should reach normalized levels already in the third quarter. In the greenfield project in Mexico, construction has already begun, and earthmoving works are already in the final stage. For the project's financing, $3 billion was already been approved by the various banks structuring the project finance.Braskem also made progress in its strategy to further diversify and improve its competitiveness through the acquisition in July of the propylene splitter assets at the Marcus Hook refinery, which will assure the continuity of operations at the polypropylene plant in the region while also diversifying its feedstock sources. And through the consolidation of its partnership with Enterprise Products with the signing of a long-term propylene supply agreement, for which a portion of the pricing is linked to the U.S. propane reference price. In July, Braskem returned to the capital markets and raised $250 million through the reopening of its 2041 bond issue. Let's go to Slide 4, please. Slide 4 shows the performance of Brazil's thermoplastic resin market, as well as Braskem's performance. Demand for the thermoplastic resins reached 1.1 million pounds in the second quarter of 2012 or 9% lower than its previous quarter. This lower consumption is explained by the continued deceleration in the domestic economy caused by the weak global macroeconomic environment, which led to contraction in Brazil's industrial chain. In this scenario, Braskem's thermoplastic resin sales fell by 6% from the first quarter of the year but grew by 4% comparing to the second quarter of last year. Read the rest of this transcript for free on seekingalpha.com