Good morning, and thank you for waiting. Welcome to Braskem's Q1 2022 Earnings Conference. With us today, we have Mr. Roberto Simoes, CEO; Pedro Freitas, CFO; and Rosana Avolio, IRO of Braskem. We'd like to inform you that this event is being recorded. [Operator Instructions]. This event is also being streamed online via webcast and will be available at www.braskem.com/i, where the respective presentation can also be downloaded. The slide deck will be controlled by you. The audio of this event will be available right after its conclusion. Remember that webcast participants will be able to send its questions to Braskem via the website, and those will be answered after the conclusion of this conference by the IR department. Before we proceed, we'd like to clarify that any statement made during this conference about Braskem's business prospects, projections, operating and financial targets are based on beliefs and assumptions of the company's management as well as information currently available to the company. Forward-looking statements are no guarantee of performance, and they involve risks, uncertainties and premises seeing as they refer to future events and, therefore, rely on circumstances that may or may not materialize. Investors and analysts must understand that general economic conditions, the state of the industry and other operating factors may affect Braskem's future earnings and lead to results which are materially different than those expressed in said forward-looking statements. Now I'd like to turn the conference over to Mr. Rosana Avolio, Investor Relations Director, who will begin the presentation. Please, Ms. Avolio, you may proceed.

Good afternoon, ladies and gentlemen, and thank you for participating in Braskem's conference call to present our results for the first quarter of 2022. Let's start the presentation on Slide 3 with the distribution of dividends. On the slide, you can see that Braskem remains committed to returning value to shareholders through the distribution of dividends, with a payment in May of BRL 1.35 billion in dividends based on net income for 2021. Therefore, combined with BRL 6 billion anticipated in December 2021, the total dividend distribution was BRL 7.35 billion, representing 77.5% of adjusted net income for 2021. Remember that Braskem has a transparent dividend policy with guidelines for determining the distribution of dividends in compliance with or exceeding the applicable laws or regulations. Let's go now to the next slide, which shows our net income. In the first quarter, Braskem posted net income of around BRL 3.9 billion, representing BRL 4.88 per common and Class A preferred share and net margin of 15%. As I mentioned on the first slide of the presentation, Braskem has a transparent dividend policy, and the proposal for distributing complementary dividends based on fiscal year 2022 will take into consideration the leverage ratio, which cannot surpass 2.5x in dollars and without Braskem Idesa in the current year or in the subsequent 2 years, considering the best assumptions at the time of decision. Now let's go to the next slide. In the first quarter 2022, recurring EBITDA was $920 million, down 19% from the fourth quarter with the decline explained mainly by the expected normalization of international spreads for the main chemicals and resins in Brazil for PP in the U.S. and Europe and PE in Mexico. The lower sales volume of main chemicals and resins in Brazil and the Brazilian real appreciation against…

[Operator Instructions]. Our first question comes from Mr. Guilherme Levy from Morgan Stanley.

My first question is about the potential migration to Novo Mercado. I wanted to understand at what stage the process is and what's the time line the company is working with at this point? And also, how has this time line changed versus your expectations at the beginning of the year? My second question has to do with your raw materials. The relative spread between your naphtha and your ethane basis, would that be very different today than it was a few months ago. I understand that it is. So I wanted to understand what your incentive is at this point? Or if there's any study that you're working with to increase your -- the flexibility of your spreads in Brazil. I wanted to understand whether that's a possibility if you're looking into that? And what would be the potential cost of that investment?

Guilherme. Well, with regard to moving to Novo Mercado, well, first of all, Braskem has introduced to its shareholders the feasibility studies and a new set of bylaws that would be adjusted to Novo Mercado. We understand that they are talking amongst themselves about our proposal and also about a potential new shareholders agreement because what we have currently is not appropriate or in accordance with Novo Mercado's rules. These are meetings that we do not take part in, but we believe that's something they are currently discussing. Now we can't say much about our time line. The plan that they've communicated and which we replicated to the market late last year was to sell our PN shares and then migrate to Novo Mercado to sell those shares. So within that plan, considering the state of the market, the offering of those PN shares has not been concluded. So we do not have an offering underway at this point. So my understanding of this situation is sort of blurry. We did not have a very clear time line. And the only thing I can say is that studies have moved forward, and we already have a draft of what those bylaws would look like, but we still need the final say from our shareholders. With regard to our raw materials, one of the stepping stones of our strategy for over a decade is diversifying our set of raw materials. In the current scenario where naphtha prices are higher, and we come to be more competitive, our operations in Bahia now operate with ethane to capture that competitiveness within the realm we operate. Also within that strategy of diversification, it's also important to remember Mexico, where the share of ethane is also increasing. We had 80% in the first quarter and the strategy of fast-tracking that has picked up, and we expect to increase by the end of June, the availability and the export capacity for ethane as well. Because of that, our prospect for the second half of the year is to have Mexico running on ethane at about 100% of its operations. So at the end of the day, our flexibility and diversification -- raw strategy ultimately puts us on a very interesting level where, regardless of where oil prices go, we ultimately have a portfolio that's adjustable to different market situations with interesting profitabilities for our operations. Now on the topic of spreads, I'll turn over to Rosana who will be giving you more details.

Yes. Thank you, Pedro. Thank you, Guilherme, for the question, to address the diversification. This strategic pillar is even broader it's not only feedstock, but it also involves geography and suppliers. So when we look at our feedstock profile, we can see naphtha gas and there's a propane portion, which is quite important. When we look at the in the American market, the producer who's having a higher profitability of PP is in the United States. So when we look at the diversification, we are looking not only at feedstock but also something broader, thinking about expanding the plant of green polyethylene. So it's always important to look at in a broader way. It's also important to look feedstock, combined with the prices of our products. As we mentioned in the presentation, the expectation of the company aligned with expectation of external consulting firms of the sector is that we should see spreads above the recent historical averages. So we saw an increase of feedstock prices. But in the last 4 weeks, we saw that the price is covered at the international level. So in fact, we are very confident towards the result of the dynamics of the spread, but we are always confident for '22 in terms of results for the company.

Our next question comes from Pedro Soares with BTG Pactual.

I have only one very quick question about your working capital. We saw your consumption really go up very sharply during this quarter. So especially looking at the chart that you brought that shows the development of naphtha prices over the second quarter, we've seen prices behaving a little bit better and ultimately stabilizing. So I would like you guys to talk a little bit about whether it makes sense for us to imagine a decreased consumption starting on Q3 in a healthier level. And if you could add any color as to what you guys expect in that sense for the rest of the year as well?

Pedro. Well, our working capital performance can be explained by at least 3 different trends. The first of them would be our sales volume trend, which went up in Q1. So you see a higher profitability level with a higher price level, which suggests a hike in consumption. The second trend is in our inventories, which went up, especially in preparation for the maintenance shutdown in Triunfo, which is already underway. We always raise our inventory levels before those shutdowns to maintain our operational levels despite the decrease in production. And the third would be the feedstock price trend in the international market, which ultimately led to a higher working capital level with the increase in our investments in that sense. Now with what's going on currently, we have 2 effects in opposite directions. First of all, compared with March, prices are a bit lower now. In March, oil prices came to $130 a barrel and it's now at $100 a barrel. So at least right now, if prices remain at its current levels, our perspective is for both our accounts receivable and our inventories are expected to be adjusted. Foreign exchange is currently a bit higher. It's above USD 5 to Brazilian reals at this point. So it's difficult for us to have a very precise forecast as to whether our working capital levels will be reversed. With the current levels, we do not believe there is any need for us to inject more capital over the course of the year in any substantial way. But that reversal could come with the decrease in our inventories because after the maintenance shutdown, inventories go back to the regular levels. But considering the international reference, prices in Brazil reals and foreign exchange rates, which are more difficult to predict. If they remain at their current level, I believe that we should probably stay with the same level of working capital. I don't know if Rosana has anything to add.

I think this is it, Pedro.

Our next question comes from Vicente Falanga from Bradesco BBI.

Well, I also had two questions. You announced this change in the mechanical recycling. How much of that do you believe would allow you guys to reach what I believe is 1 billion tons by 2030? And how much of that target would depend on chemical recycling? And do you guys have anything to share on that front? And my second question was, I believe that at one point, you guys were considering maybe make your dividend sharing policy clearer as a connection to the -- your cash flow. If you guys have anything to add in that sense, that would be great.

Vicente, great to hear from you. Well, in recycling, we have 3 targets. We have the target of reducing recyclable product sales by 320 tons by 2025 and then by 2030 by 1 billion tons, and we have the target of 2030 not considering necessarily Braskem's recycling or recycling of Braskem's plastic products, reducing all that plastic from the environment by 1.5 million. Currently, without the anti-AV, our recycling capacity is about 23 million tons, and AV brings another 23 million. So it would be sort of halfway toward the 2025 target. Now when we look at what this announcement or this company, we are joining is we -- they bring a technology that we believe to be scalable and which can be used in different countries or different areas of the planet. And it's a proprietary technology, which we believe, may speed up how fast our capacity to grow in this market. So if that growth comes to pass, over the next few years, we expect to have new recycling plants adopting or deploying this technology, which has something very interesting about it. In that, it does not produce a resin, but actually a ready-to-use product in both civil construction and also in pellets for transportation. So these are products that can be used globally. They're not that specific. So we believe we can adopt this technology in several different places and use that as a platform to grow. Among others, obviously, this is not the only growth platform we have, but it will become another platform for Braskem to grow in recycling. So it's a completely different business model with a specific scalable technology. So -- all of these elements, which are very interesting, will come into play. You also asked about chemical recycling. In that sense, Braskem is still looking at different technologies. We have a few projects underway, but nothing at this point that's mature enough to disclose. Some of them are at a technological development stage and others, we are still looking for a business plan that's feasible and that works. So running a number of tests, but at this point, nothing that's enough -- at a stage that's advanced enough for us to announce.

Okay. Perfect, Pedro. Now another -- my other question about your dividends, is there anything you guys could comment on?

Yes, of course. Rosana?

Yes. in relation to our dividend policy, we have one established that defines a minimum amount according to the applicable legislation, 25% of the net income. And we also established the cap, our company is cyclic. It's very important to keep a level of investment that creates a lot of value to our company. So we established a cap that considers the impact in the corporate leverage of the company and also considering a minimal distribution in the medium term. What we have been discussing according to your question considering that we are a dollarized company and we understand it's difficult to model the net income of the company and to come to a consensus in terms of market. Maybe we should have a metric close to cash generation or linked to cash generation, but we're still studying it. The discussions are incipient. And we are going to have dividend policy that we establish, considering that we are cyclic. And reinforcing, we will -- we also try to have an efficient capital allocation. We want to have a well-equated debt level, make investments in the avenues for growth that we have already announced based on the competitive advantage that we have in the sector, especially renewables and recycling and return value to the shareholders. And last year was a good example where we are going to balance the 3 fronts, and we are -- yes, we are going to return more value to the shareholders.

Our next question comes from Luiz Carvalho with UBS Investment Bank.

I have three questions. And if you could maybe go back to the partnership in production that you mentioned answering the first question. I just wanted to understand how does the price trend of your shares -- what does it represent in terms of that partnership? We believe that the tag along will no longer exist, if that were the case. If you could add more color in that sense? And the second, we have been discussing a lot since the beginning of the year about the spread issue. As you mentioned, feedstock prices have gone up significantly because of the rise in oil prices. And as obviously, there might be adjustments in ticket prices for transportation. And looking at China, I'd also like to understand what you guys are -- or how you guys are seeing the challenges in passing along those increased prices to your end consumers? And the third question, if you could guys could comment on the potential regulatory changes, both in Brazil and Mexico. We see a lot of talk going on this week. We heard that petrochemical products could enter a list of products with lower tax rates. We also heard that the import issue could be affected in several ways. I wanted to hear from you what you guys are sensing in that on that front.

Luiz, thank you for your question. Look, with Novo Mercado, I think that question you asked us should be asked to our shareholders. We don't really know how their decision-making process works. And whether share prices affect that decision in terms of moving to Novo Mercado. What we saw was something with regard to our supply, but I think that with regard to Novo Mercado, that's something you should be asking of them because we do not have that information. Now as to how oil prices have performed in the passing along of costs, we continue to base our policies on the international price trend. So basic chemical products and the resins we sell are still following the international price trends. And considering the trend of the industry seeing as we deal with commodities and prices ultimately follow the marginal producer prices. And with today, with the margins that we have, the benchmark would be Asian producers. So if feedstock prices increase, that will affect marginally the producer prices, so that will transfer to our prices as a consequence. And looking at the historical trend for several years, that transfer could be or could take place very quickly in a span of 2 or 3 weeks or it could take a few months to come about, but we always see that looking at historical records that it ultimately occurs. We do not have any example looking at the record from the past that the prices were not passed along to the final prices. So we expect those prices to be transferred. We've seen some of that transfer take place already across most of our products. Maybe one or another product, we still expect some adjustment to occur, but mostly, we believe that the structural -- the way the industry is…

Our next question comes from Gabriel Barra with Citibank.

I just wanted to touch on the investment issue. I think it changed a lot in terms of your strategy to add value, considering the value structures. With that in mind, I wanted to understand a little bit the return side if you could talk a little bit about recycling any Mexico terminal. Give us some idea as to how much do you expect -- in terms of returns on those investments? And going back to Mexico, I think it's been a while since you've looked for a partner to invest in your import terminal. And my question is let's say, that partner doesn't exist. What would your decision look like? And what would be your investment within JV? Would that be made by Braskem itself? How would that work if there were no strategic partner for you guys there? That's sort of the answer we're looking for.

Gabriel. Well, we have a very robust analysis process in terms of when and where to make our investments using a range of different tools and scenario analysis. It ultimately what we have, at least historically, is that most of Braskem's investment, especially the larger investments, record a return rate of over 20%. The larger ones, sometimes with rates that are even higher than that. So our decision-making process ultimately lead to that level of return in, that's about the level we see with these projects for green ethane and growth in renewables and also domestic investment. It's still a little bit lower than that in recycling. I think not only us but all players in the business are still looking for business models that will generate higher returns. We expect the investment and this partnership we have in the Netherlands will bring interesting returns on our capital investment. But at first, even to develop the business, I mean, not all not all renewables and recycling projects reach that level I mentioned. So this is a feature we enjoyed, a characteristic of ours, investments that are not necessarily paying out in the beginning, but that ultimately generate high rate turns. So the regular process for the company ultimately lead to very interesting return rates. Bear in mind that our investments are always made in U.S. dollars. So we are talking about at least 20% denominated in U.S. dollars. Now about our partner in Mexico. We are at a very advanced stage in our decision-making. And even our Board of Directors was informed yesterday of who our partner will be. So our selection process is essentially concluded. It still needs the Mexican side of Braskem to approve that, but I think I can say that the partnership is essentially determined and should be announced to the market over the coming weeks once we have the ultimate approval stamp in Mexico.

Pedro, we received some messages on the webcast. I'm going to read the questions in Portuguese. There is a question here from Eduardo with Bradesco Security. He asks if we could provide some additional color on the net debt in the new cyclic phases and in the long term? And what are the options available to keep the leverage within our targets, if there's any important changes in the global scenario?

Thank you. And thank you, Eduardo. I just wanted to remind everyone that keeping its investment grade as a priority to Braskem. We are even working to seek receiving investment grade with Moody's as well, that's a major focus for us. And -- so with that in mind, we want to maintain our leverage levels within what's determined in our guidance. So an average leverage of 2.5x. And we understand that we may even have the declining cycles leverage ratio that's a little bit higher. As long as we have a clear de-leveraging plan, we have found our seat situation before. And we agreed -- we entered an agreement with those credit rating agencies not to be downgraded. But yes, that's a main focus for us. Our leverage is under control at this point. Our leverage is 1x our net or net debt-to-EBITDA ratio. It is likely to go up a little bit because of our EBITDA and how it's performed compared to last year. We had extraordinary results, and we do not expect to maintain the same level as we had last year. But within our view and our prospects and even if you look at market consensus in terms of what would be Braskem's potential result this year. Despite that decrease, we'll still remain comfortably below that 2.5x that we have as a capital. So that's an adjustment that we expect to have, and we are prepared for it. And there's no concern about that in any shape or form when we think about that cycle adjustment. So, even so -- even if the scenario deteriorates more than we expect, I'd like to remind you that Braskem has in place a policy to be very -- to have very little exposure in the near term. So our debt…

There's another question here, I'm going to read it Thomas with. Thomas, for the question. He says that he has some questions in relation to Mexico's operation. The first is, given our corporate strategy of diversifying feedstock. And he mentions reducing the naphtha share, are we considering an expansion in the Mexico plant, especially considering the context that the terminal will be finished in 2024 since this is going to have additional capacity for importation of ethane? And Thomas also asks us to provide that guidance in relation to the dividends to be received by Braskem it is? And when those dividends will be received?

Thomas, and thank you for your questions. Well, yes, I think the possibility of expanding in Mexico is something that really plays into our strategy to diversify our feedstock and grow internationally. The Mexican plant is one which is already ready for expansion. It was built with expansion in mind. So once the terminal is open, we have that feedstock availability. So we will try to enable that expansion. At this point, we do not have an approval to invest in expansion there, but it would make perfect sense to do so. After the terminal's performance is proved, we would probably seek to expand there in a very competitive way, seeing as the asset is already prepared for such expansion. Now about paying dividends in Mexico. Braskem Idesa within its capital structure and the financial commitments it has and especially considering the bonds that were issued by Braskem Idesa, there's already some -- there's already a room of about $40 million to pay dividends, Braskem plus Idesa, to pay $40 million a year to -- in dividends to its shareholders. That's already allowed within its bonus paying structure. Last year, those $40 million were paid at the end of the year in December. So when we look at this year, we do expect Braskem Idesa to pay those dividends. And it's difficult for us to set a specific month that will depend on Braskem Idesa's cash situation. I think that after we announced the partner with the terminal and conclude the engineering plan and also to outline the financing terms for the terminal, we can probably expect those dividends to be announced. But I think the focus primarily is to bring that value to Braskem Idesa. And once the financing terms have been outlined, we can expect those dividends -- the dividend payments to be announced.

[Operator Instructions].At this time, we are concluding our Q&A session. I'd like to turn the conference over to Roberto for his final remarks.

Good morning, everyone. I'd like to thank everyone for joining our earnings conference and also share some remarks with you. This was another quarter with healthy results. And I'd also like to stress that our feedstock diversification strategy was only possible because of the company's strategy that was implemented over 20 years ago. And the results that show us very clearly, we could mitigate the challenges we may have in South America, Brazil, Mexico or Germany can be offset by other areas. And also, we see the diversification in feedstock, our reduced reliance on naphtha and being able to make good use of the spreads with ethane. And also our operations in the United States, we can have distinguished operations in those 2 markets. It's also important to stress that we're still very much committed to a healthy capital allocation, keeping a cash flow that's very healthy. We've talked about that before, always prioritizing our higher returns to our shareholders. In May of 2022, we paid dividends of by BRL 1.35 billion with -- added to those BRL 100 million that were paid early in December 2021 add up to BRL 7.35 billion, which is 77.5% of the company's adjusted net profit in the year 2021. And I think that considering everything that was shared with you this year, we remain very much confident about this year's results, expecting spreads that are even higher than the recent historical average despite the scenario of political tensions with a scenario that's very much in line with what external consultants in the industry expecting. So once again, thank you for joining us, and we should be together again in August when we will announce our Q2 earnings results. Thank you very much, and see you then.

Braskem's earnings conference has now concluded. Thank you, everyone, for joining us, and have a great day.