presentation – 1 q04 results

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www.braskem.com.br

Presentation of

1Q04 Results

2

This presentation includes forward looking statements. Such information is notmerely based on historical fact but also reflects management’s objectives andexpectations. The words "anticipate", “wish", "expect", “foresee", “intend", "plan","predict", “forecast", “aim" and similar words, written and/or spoken, are intendedto identify affirmations which, necessarily, involve known and unknown risks.

Known risks include uncertainties which include, but are not limited to price and

product competition, market acceptance of products, the actions of competitors,

regulatory approval, currency type and fluctuations, regularity in the sourcing of

raw materials and in operations, among others. This presentation is based on

events up to March 31, 2004 and Braskem is not liable to update the contents in

the light of new information and/or future events.

Braskem takes no responsibility for transactions or investment decisions made on

the basis of information contained in this presentation.

Disclaimer – Forward-Looking Statements

3

Braskem – 1Q04 Highlights

Braskem maintained its market leadership at ~ 40% for PE, PP andPVC resins;

Exports amounted to US$ 133 MM;

EBITDA reached a record level of R$529 MM in 1Q04, with a Marginover Net Revenues of 25%;

Synergies captured totaled R$ 310 MM, or 94% of the estimatedtotal;

Scheduled operating shutdown of the Raw Materials Center II(Aromatics II and Oleofins II) at the Basic Petrochemical Unit inCamaçari, with a duration of 35 days; the next scheduled shutdown isto occur in six years’ time;

Simultaneous scheduled shutdowns at the Polyolefins, Vinyls andBusiness Development Units located both in Camaçari and Alagoasstates;

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Braskem – 1Q04 Highlights

New products launched: Braskem Symbios® (BOPP) and BraskemFlexus®;

Capital Expenditures: capacity expansion proceeded for both theproduction of PVC (+50 kton/year – new capacity available in the2nd half of 2005) and PP (+100 kton/year; new capacity available inthe 2nd half of 2004);

Trikem was successfully merged into Braskem: “free-float” reached36% and paid in Capital R$ 2.2 Billion;

Re-profiling of Braskem’s debt concluded: short-term debt on 3/31/04was reduced to 32% of total gross debt; Cash & Cash Equivalentssurpassed R$ 2 billion and the net debt/EBITDA ratio was 3.42;

The average price of ARA Naphtha during the period = apprx.US$ 323/ton– about R$ 933/ton (against R$ 1,114/ton in 1Q03);

On 4/1/2004 Board of Directors approved a public offer of aboutR$ 900 MM in new Pref. “A” shares, depending upon marketconditions.

5

Braskem – Industrial Performance

223,271 229,165 (3%)

388,875 382,974 2%

113,049 107,532

163,635 156,688

94,750 103,844

1Q04 (A)

1Q03 (B)

Chg (A)/(B)

Production - Ton

5%

4%

(9%)

ETHYLENE

PP

PE

PVC

Total Thermoplastics

Main Products

Note: Scheduled shutdown for maintenance and inspection at the Camaçari and PVC Alagoas units carried out in 1Q04

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Average Capacity Utilization

Braskem - Industrial Performance

1Q04Main Products

ETHYLENE


PP

PE

PVC

94%

82%

81%

71%

85%

1Q03

94%

77%

89%

84%

76%


7

Braskem – Sales Performance

ETHYLENE* (1)

PP

PE

PVC


212,982

399,165

107,249

164,660

108,811

Main Products 1Q04

230,251

400,568

111,716

164,033

110,679

1Q03

Sales Volume - Tons

Chg(A)/(B)

(7%)

0%

(4%)

0%

(2%)

(A) (B)

(1) In 1Q04, 105,000 tons (49%) were sold /transferred to Braskem’s Business Units. This amount was 102,000

tons in (45%) in 1Q03.

* Scheduled shutdown for maintenance and inspection at the Camaçari and PVC Alagoas units carried out in 1Q04

8

North

America

36%

Europe

20%

Asia

24%

South

America

20%

Braskem - Exports

Exports Market – 1Q04

Exports(US$ Million)

137 133

1Q03 1Q04

-3%

Exports/Net Revenue

(%)

2118

1Q03 1Q04

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Net Revenue

Cost of Goods Sold

Gross Profit

EBITDA

EBITDA Margin

Net Financial Result (2)

Net Income

1Q031Q04 Var (A/B)(A) (B)(R$ Million)

Gross Margin

2,292

(1,823)

469

450

(87)

131

20%25%

2,141

(1,585)

556

529

(368)

10

(7%)

(13%)

19%

18%

322%

(93%)

-

20%26% -

Operating Income (1) 358393 10%

Operating Margin 16%18% -

Equity Income 2951 76%

Braskem - Income Statement

(2) The impact of the net exchange variation on financial income was a negative R$ 75 million in 1Q04, while it was positive

in 1Q03 by R$ 193 million.

(1) Before financial income

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Business Units

Braskem - Net Revenue per BUs

R$ Million

1,758

688

575

383

113

383

2,141

(A)

1,819

777

594

329

119

473

2,292

1Q03 (B)

(3%)

(12%)

16%

(5%)

(19%)

(7%)

Chg (A)/(B)

1Q04

(3%)

Domestic Market

Basic Petrochemical

Polyolefins

Vynils

Business Dev.

Exports

Total Net Revenue


11

Braskem – Cost of Goods Sold

COGS 1Q04

R$ 1,585 Million

Other Variable Costs

18.5%

Naphtha65.1%

Others1.2%Services

2.6%

Depreciation5.0%

Wages & Benefits3.0%

Materials1.1%

Electricenergy3.6%

Naphtha price(R$/t)

6,200

6,400

6,600

6,800

7,000

Dez 2002 Mar 2003

1,114

933

300

500

700

900

1,100

1,300

1Q03 1Q04

- 16%

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Braskem – Changes in EBITDA (R$ Million)

1Q03

450

529

Reduction of Prices

187

Fixed and Variable Costs

(19)

OtherOperat.

Rev./Exp.

0

Sales Volume

1Q04

(90)

13

Braskem – Evolution of EBITDA and Operating Income(1)

Operating income (1)

(R$ Million)

(1) Before financial income

EBITDA

(R$ Million)EBITDA

(US$ Million)

1Q03 1Q04

450

529+18%

1Q03 1Q04

129

183+41%

1Q03 1Q04

450

529+18%

1Q03 1Q04

129

183+41%

1Q03 1Q04

358

393+10%

14

129

136

157

159

183

1Q03 2Q03 3Q03 4Q03 1Q04

EBITDA EVOLUTION

(US$ million)

450

405

461 461

529

1Q03 2Q03 3Q03 4Q03 1Q04

EBITDA EVOLUTION

(R$ million)

Braskem - Steady EBITDA Growth

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Braskem – Competitive EBITDA Margin

Source: Thomson Financial Investor Relations

* Average EBITDA margins from the following companies : Dow, DuPont, Solvay, Lyondell, Nova Chemicals and GeorgiaGulf based on public earnings data from 1Q04 and 4Q03. In 1Q03 includes Basf, Eastman and Reliance in addition to

those already mentioned, except Nova Chemicals.

EBITDA MarginPetrochemicals (%)

Industry Average (*)

1Q03 1Q04

25

14

20

12

4Q03

18

11

16

Braskem – Participation in Subsidiaries and Affiliated Companies

(R$ Thousand)

Participation in Related CO´s 1Q04 1Q03

Equity Income from Subsidiaries (694) 69

Equity Income from Affiliates 52,089 29,125

. Copesul 38,727 13,964

. Politeno 8,316 10,666

. Petroflex 4,099 4,554

. Other 946 (59)

Foreign Exchange Variation (1,111) 8,210

Other 845 47,716

SubTotal (before amortizations) 51,129 85,121

Amortization of Goodwill (38,186) (65,160)

TOTAL 12,943 19,961

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Braskem – Consolidation of Depreciation and Amortization

(R$ Thousand)

Depreciations and Amortizations 1Q04 1Q03

1. Depreciation/Amortization

(COGS) 78,499 68,749

2. Amortization of Deffered Assets and

Depreciation of non Operational Assets

(Expenses) 70,515 43,796

3. Amortization of Goodwill

(Participation in Related CO`s) 38,186 65,160

TOTAL (1 + 2 + 3) 187,200 177,706

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Braskem - Financial Income and FX Rate Effects

* Includes updating of tax provisions, financial expenses with suppliers, mark-to-market and hedge position and others.

R$ Million

Net FX Rate Variation

Net Financial

Income

Financial Expenses

CPMF / IOF / IR

Interest

Interest/Monetary Restatement/Vendor

Others*

FX Rate Variation

Financial Revenues

1Q03

(280)

193

(87)

(36)

(24)

(51)

33

(84)

(286)

(3)

277

1Q04

(75)

(293)

(368)

(414)

(18)

46

43

2

(284)

(35)

(77)

Others 1

Fin. Income before Exchange Rate Variation

0

FX Rate Variation

19

Braskem – Reduction of Financial Leverage with Improving Liquidity Levels

* LTM – last twelve months.

1,085

2,079

Cash, investments and Mkt. Sec. (R$ million)

Dec 2003 Mar 2004

+ 92%

Net Debt/EBITDA (LTM*)

3.52

Dec 2003 Mar 2004

3.42

-3%

20

Braskem – Debt Amortization Schedule

Profile Compatible with Cash Generation and Cash Balance/Investments/Mkt.Sec.

(in R$ million)

16.6%

2005

8.9%

27.2%

9.5%

2006 2007 2008

780

Subordinated debentures, with principal and

interest due in July, 2007, fully subscribed by the

controlling shareholder.

2014

8.6%

Mar/04 to Dec/04

29.1%

Mar/04Cash, Banks

MKTBLE Securities

1,5152,455 1,397 752 802 7292,079

Gross Debt: 8,430

Net Debt: 6,351

21

1. 75 % Financing Not Linkedto ExportsUSD 256 MM

2. 60% Financing Linked to ExportsUSD 150 MM

Total : US$ 406 MM

Braskem — Management of the Exchange Rate Risk

IGP-M

2%

CDI

18%TJLP

14%

66%

US$

Hedge1. Hedge/Investments USD 327 MM

2. Export credits USD 148 MM

Total : US$ 475 MM

POSITION ON 03/31/04

Overhedge : USD 69 MM

0

100

FINANCING LINKED TO EXPORTS

60%

60 %0

100

FINANCING NOT LINKED TO EXPORTS

60%

75 %

Hedge Policy

Level of hedging protection.

Breakdown of Gross Debt by Index (Mar/04)

Trade Finance

18%

22

* LTM – last 12 months.

+18%2,758

-4%

450

529

1Q03 1Q04

2,886

3.52

D = -R$ 121

Dec 2003 Mar 2004

3.42

1Q03 1Q04

1,085

2,079-3%

Dec 2003 Mar 2004

+ 92%

10

1Q03

131

1Q04

10

1Q03

131

1Q04

Gross Revenues (R$ million) EBITDA (R$ million)

Net Income (R$ million)

Net Debt / EBITDA (LTM*)

Evolution of Cash, Banksand Markt. Securities

(R$ million)

Braskem – 1Q04 Performance

23

Braskem – Synergies Captured

* Gains on recurring and annualized bases

Synergies *(R$ Million)

94% of the goal already reached!

Goal = 330

240

Jun/03 Sep/03

260

Dec/03

285

208

Mar/03

(2004)310

Mar/04

24

Petrochemical Cyle: Utilization Rate in the U.S.

Source: Chemical Market Associates Inc. (―CMAI‖)

2003 Main Products

PP

HDPE

PVC

2004* 2005*

LDPE

LLDPE

* Estimated

Data from CMAI from April 20, 2004

81% 86% 88%

92% 94% 96%

89% 91% 93%

81% 87% 90%

87% 91% 94%

25

(Naphtha vs LDPE)

Source: Bloomberg, updated to 04/30/2004

Evolution of LDPE/ Naphtha Prices

100 = January 03, 2003

N aphtha

118

LD P E

139

60

80

100

120

140

160

Jan-0

3

Feb-0

3

Mar-

03

Apr-

03

May-0

3

Jun-0

3

Jul-03

Aug-0

3

Sep-0

3

Oct-

03

Nov-0

3

Dec-0

3

Jan-0

4

Feb-0

4

Mar-

04

Apr-

04

Naphtha LDPE

Petrochemical Cycle : Evolution of International Prices

26

Source: Bloomberg e CMAI, updated to 04/30/2004

Prices in US$/ton

HDPE

840

PP

840

PVC

893

$500

$600

$700

$800

$900

Jan-03 Feb-03 M ar-03 Apr-03 M ay-03 Jun-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Apr-04

HDPE - US$ PP - US$ PVC - US$

Petrochemical Cycle : Evolution of International Prices

27

Profitability of the U.S. Petrochemical Industry

Cash Cost Margin

0

50

100

150

200

250

300

350

400

450

1975 1980 1985 1990 1995 2000 2005 2010

19

82

In

dex =

10

0Petrochemical Cycle: Evolution of Margins

Source: Nexant – Chem Systems

10 YEARS7 YEARS

Actual Forecast

9 YEARS

28

Braskem - Value Creation Opportunities

Leader in the Latin American thermoplastics market;

Integrated operations allowing capture of synergies and competitive costs;

Consolidated businesses and superior margins;

Expansion of PVC (+50 kton/year) and PP (+100 kton/year) production capacities being implemented;

Programs in the areas of Innovation and Technology, Business Competitiveness and Supply Chain Management, focused on the creation of value;

Adoption of 100% tag along rights for all shareholders;

Potential of growth in sales volumes and profitability in the upcoming years.

A Brazilian world-class petrochemical company!

Visit our website:

www.braskem.com.br

Presentation of

1Q04 Results