Good morning, ladies and gentlemen. At this time, we'd like to welcome everyone to Braskem Third Quarter 2013 Earnings Conference Call. Today with us, we have Carlos Fadigas, CEO; Mario Augusto Da Silva, CFO; and Roberta Varella, Head of Investor Relations. We would like to inform you that this event is being recorded. [Operator Instructions] We have simultaneous webcast that may be accessed through Braskem's IR website, www.braskem.com.br/ir. The slide presentation may be downloaded from this website. Please feel free to flip through the slides during the conference call. There will be a replay facility for this call on the website. We remind you that questions, which we will be answered during the Q&A session, may be posted in advance on their website. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of Securities Litigation Reform Act of 1996. Forward-looking statements are based on beliefs and assumptions of Braskem management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Braskem and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the conference over to Ms. Roberta Varella, Head of IR. Ms. Varella, you may begin the conference. [Audio Gap]

Conference call. Today, we will be commenting on our results for the third quarter and the 9 months of 2013. First, we'd like to remind you that pursuant to Federal Law 11638 as of 2007, the results present in today's presentation reflect the adoption of International Financial Reporting Standards. Note also that as of the second quarter of 2012, the company began to recognize investments in jointly controlled companies using the equity method and no longer based on proportionate consolidation. The company also currently has assets in the process of divestment. And therefore, the results are recognized as discontinued operation results. The information in today's presentation was reviewed by the independent external auditor. Let's go to next slide, where we'll begin our comments. On Slide 3, we present the highlights of the third quarter of 2013. The average capacity utilization rate of Braskem's crackers stood at 92%, down 2 percentage points from the previous quarter. The decline was due to the power outage that affected Northeast of Brazil in late August and forced -- and scheduled shutdown at Braskem's plant in the region. The Brazilian market of thermoplastic resins amounted to 1.3 million tons, decreasing 8% from the second quarter when demand presented a sound performance. Compared to the same quarter of last year, the Brazilian thermoplastic resins market decreased by 3%. In this scenario, Braskem's sales came to 898,000 tons or 6% lower than the second quarter, which led to a 2-percentage-point recovery in its market share. EBITDA reached BRL 1.6 billion, benefit from the contribution margin and the positive impact from depreciation in the Brazilian real. Another factor was the positive impact from the recently completed tax rate relief on raw material purchase, which was one of the proposals made by the chemical industry and was approved by…

[Operator Instructions] Mr. Denis Parisien from Deutsche Bank would like to make a question.

I have a couple of questions. The first one is could you help me reconcile, please, the statements on Page 2 of the press release, where you discussed the repayment of -- reimbursement of $649 million of the previous bridge loan debt with the project finance debt with -- on Page 12, where you discuss total consolidated debt, including the project finance debt would be $9.625 billion and then the debt of minus the project finance would be $8.145 billion. And I guess the difference there you give on that page being $1.4 billion, so it rounded up to $1.5 billion. And how should we consider your total debt with the project finance? I guess, is the $9.625 billion -- is that -- but I'm not just sure how the $650 million reimbursement fits into that.

Hi, Denis. This Mario. Good to talk to you again. So what you can see here, right, we have $9.6 billion of net -- gross debt as of September, and we had a disbursement of $1.5 billion. A portion of that disbursement was dedicated to reimburse both shareholders, to reimburse Braskem in the amount of $649 million. Remember that last year, we had to anticipate resources to the project in the form of bridge loan. So as a consequence, when we had the disbursement of the project finance, a portion of that money was dedicated to reimburse both Braskem, let's say, in Brazil and Idesa, the other shareholder that we have in the project after Mexico -- in Mexico. So it's just a matter of the use of proceeds of debt to $1.5 billion that was disbursed in July. So gross debt of $9.6 billion. We thought the project finance $8.1 billion. And in terms of net debt, the $8.1 million minus the cash position that we have at this point, we have a $6.5 billion net debt, excluding the project finance of Mexico. So it was just a matter of use of proceeds of the long-term debt that was disbursed in July. I don't know if this answers your question.

Yes. If I might go on, you mentioned in several places, the tax break on raw materials helped reduce cost and increase EBITDA margin in the quarter. And then you have a fourth factor of, I guess, a onetime reimbursement for PIS/COFINS coming from RioPol. But is it possible to quantify the amount that your COGS were reduced or your EBITDA benefited from the tax -- the new tax and accounts scheme in the quarter? And how much you expect that to be in the fourth quarter? Looking at the moving average -- the 3-month moving average of naphtha prices in the market, clearly, you had a very nice average down in the third quarter. And as you pointed out and hinted on in your press release, that average is now sliding back up in the fourth quarter. How much of that's due to the spike obviously that occurred in the third quarter, but averages in, in the fourth quarter? I'm just wondering if we can get some kind of idea of how much of that increase in the average price of naphtha that's coming in the fourth quarter that will feed through your cost. How much of that would be offset by the tax -- the new tax regime that's giving you a break there? And can you quantify how much that was in the third quarter? Carlos José Fadigas De Souza Filho: Okay. Denis, it's Carlos Fadigas speaking. First of all, hi, good talking to you. We had a onetime regarding RioPol that we mentioned. So that's one, that wasn't the last quarter. What is recurring is the tax rate from raw materials and debt at the current exchange rates and at the current naphtha price represents roughly about BRL 250 million per quarter. This number, naturally, because…

That's great, yes. We have the -- we used to be able to get the add-up price off Bloomberg, but they stopped providing it. So it'd be great if you guys could help us out with that. That would be fantastic. Carlos José Fadigas De Souza Filho: We can do that.

That's great. That's very helpful for us for modeling purposes. A last quick one. It seems like you're indicating that the cost of raw materials are going up around 9%, and you're suggesting that polyolefins goods' price is going up 4% to 5%. That sounds like you're expecting an erosion in spreads in the fourth quarter. Or is there something in that calculation I'm not understanding? Carlos José Fadigas De Souza Filho: We don't expect an erosion in margin. But the point that -- we'd probably have to factor in the price of the core product in naphtha. So sometimes polyethylene, polypropylene don't move up as fast as naphtha, but that gets compensated by the fact that out of the core products, butadine, benzene, paroxetine and so on also move with naphtha. And so my final point is, overall, we do not expect an erosion in margin that we see in the fourth quarter compared to the third quarter in the international market. It's a lot of moving pieces, but the end result is that we expect stable margins. We're seeing stable margins in the fourth quarter for the [indiscernible] to producer coming from naphtha.

[Operator Instructions] Mr. Christopher Buck from Barclays would like to make a question.

I'm wondering if you can clarify the CapEx? I wasn't able to fully understand the comments you made. It's now expected that CapEx for this year is going up to BRL 2.5 billion from BRL 2.2 billion. I mean, could you clarify again that has to do with a tax reimbursement in Mexico? Carlos José Fadigas De Souza Filho: Fadigas speaking. You are right. At this point, we believe that we're going to finish the year with a total CapEx of roughly BRL 2.5 billion. Some BRL 300 million above the initial forecast of BRL 2.2 billion. The full difference is coming from the difference in the investment in Mexico and the fact that we're spending more cash with the Mexican investment this year has to do with 3 things: The first one you mentioned, and let me explain the first one in more detail. When you make an investment in Mexico, you pay the full amount for equipment and services that you entitled, so we receive back some of the taxes embedded in the price of the equipment themselves. We forecasted the cash flow disbursement considering that the government would give us back these taxes faster than what we are actually reimbursing up. It's purely a time effect. So it may take us 1 or 2 quarters more to get this money back, but it does not change the overall cost of construction. So it's very important to mention that we are not talking about a cost that we want. It's not the case. It's just, in each quarter, we are getting the money back and that's the first effect that we make an investment in Mexico within the year. The second one has to do with the exchange rate. The investment there is relatively limited investment, and the guidance we have given in Brazilian reals, so guidance was built, designed, defined about a year ago at the end of 2012. And therefore, we have to factor that spending the few amount of dollars in Mexico will present a little bit more off Brazilian reals. And the third and final effect has to do with a guarantee that the critical equipment gets on site as fast as we can. So it has -- it doesn't change the schedule for the construction -- for the assembly of the project. So this BRL 300 million of additional CapEx that you are forecasting for this year, roughly $150 million, $140 million has to do with these 3 effects, all of them associated with the Mexican project and, again, we are not talking about any cost that we want. We have had a good discipline in the past with investments, and we are working very hard to keep this instance in this case.

Okay, great. Do these factors -- how should we think about them in 2014? And we saw some headlines -- or comments that investment might increase next year. Can you comment on that? Carlos José Fadigas De Souza Filho: Yes. First of all, the Mexican overall investment as, I mentioned, will remain the same, even when we add all the years coming from '11. And I believe we had some cash growth from '11, '12, '13 and '14 and, actually, '15 as well. So that won't change. What has changed is how it gets allocated between '13, '14 and '15 between these 3 years. When we say the overall investment for Braskem may increase next year, that has to do with the fact that we want to have another maintenance stoppage in all our crackers in Brazil. They stop work every 6 years, that's industry standard. You have to stop them. Actually, we've been pushing to make this to a limit -- in the past, we stopped them once every 4 years. And then we move to 5. And now we move to 6. And it's been challenging to the teams to increase the business between one, again, stoppage and another one. In 2013, we had one, again, stoppage that just happened at our cracker in Bahia in our case review. But Next year, we are going to have 2 crackers stopping. We're going to have the one in Río Grande do Sul, the Southernmost state of the country, and we're going to have the Guacuri in the state of São Paulo stopping as well. We've stoppage of -- it's roughly BRL 200 million to BRL 300 million to give you a round number. And because we're going to have 2 of them, that should push the total investment up a little bit. So it won't have to do with next, it has to do with the factory that's going to have run from this amount kind of stoppage for the next year. We are, right now, discussing this number with the shareholders. We're going to have a Board of Directors meeting at December to discuss the forecast and the budget for 2014, and that's why I can't give you the exact number right now. I know we have to agree on that with the board. But beginning in January, you're going to have this number available to give you an idea of how much we're going to be investing in 2014.

Okay, great. Could you also comment on your discussions with the rating agencies and if there's been any changes given the rising EBITDA? Or what are the other factors that the rating agencies are looking at when thinking about your rating?

Hi, Chris. This is Mario. We have been having discussion with some of the rating agencies in the past 3 months. Probably, you know that S&P -- both S&P and Fitch, they have reviewed our rating, and we show an investment-grade company in the case of S&P, with a stable outlook in the case of Fitch. To a negative outlook, however, if you take a look in the reviews of Fitch is already indicating that if we continue the level of results that we've been showing in 2013. There is a window of opportunity to revise the outlook from negative to stable. So I think we're improving the financial indicators of the company. At this point, we have a net debt-to-EBITDA of about 2.7 coming from 3.3 in the beginning of the year, 3 in the second quarter, now 2.7. So I think as a result of the stronger demand and cash generation that we had this year, financial indicators are better. We keep working with them. And we expect that beginning of 2014, we're going to keep trying to remove the negative outlook that we have with both Fitch and Moody's. S&P still have a positive view for the Braskem piece, okay?

[Operator Instructions] I will turn over to Mr. Carlos Fadigas for closing remarks. Carlos José Fadigas De Souza Filho: Well, let me thank you for joining us at this call. Thanks for your interest in Braskem. And actually, we had a good quarter. EBITDA increased significantly, so we're glad to have notable efforts are paying back. The Braskem teams in the different areas have been working very hard to reduce fixed cost against an environment where with inflation is roughly 5% to 6%, labor inflation -- labor associated inflation is 8%. But we work with this gross. We've been working to increase the operating rate of the cracker that we have. We increased market share. At the same time, we have managed to get some tax reductions on raw materials. We are keeping the discipline on investments we are making. The most relevant one is the Mexican investment. So we've been working very hard to make -- to do everything we can to improve profitability of the current assets we have, and this quarter shows we have been successful in that front. We also have been working very hard to build additional capacity and, based on that, be more competitive to have a more balanced raw material matrix. That's the case again for Mexico. That's the case for Comperj. We've been working hard with [indiscernible] with the Brazilian government to make sure we do develop the petrochemical complex in Rio de Janeiro. At the same time, we also had been looking for opportunities, searching for opportunity in the U.S. as well around the ethane, ethylene, polyethylene front. We are the leader in polypropylene, but we don't have a presence in North America, in United States right now in polyethylene, and that's something we are looking into. So that's our commitment, improving profitability of our current assets, at the same time, as we work to build a bigger, more competitive Braskem going forward. So thanks, again, for your interest. I invite you all to visit our Investor Relations website. We have posted a video of our Mexican project there. It's a very nice video. It's a short one at 1.5 minutes. So it's a small time investment to see what it looks like, a huge petrochemical complex, being viewed with more than 10,000 people working at the same time with more than 80 cranes available to move equipment and to start the assembly of this petrochemical complex. It's much more than just building one plant. We are building power stations. We are building utilities, water treatment, and as we viewed the cracker and the 3 polyethylene lines, all at the same time, for our total in years of bringing new projects. So I invite you to visit. It's a very interesting feature. I wish you'd have a good weekend, and we're going to have another call again, one in the beginning of next year, so anticipate here my wishes of happy holidays. Merry Christmas to everyone of you. Thanks.

Thank you. This concludes today's Braskem's Earnings Conference Call. You may disconnect your lines at this time.