Carlos Fadigas - Chief Executive Officer Mario Augusto da Silva - Chief Financial Officer Roberta Varella - Investor Relations Director.

Frank McGann - Bank of America Pedro Medeiros - Citigroup.

Good afternoon, ladies and gentlemen. At this time, we would like to welcome everyone to Braskem Second Quarter 2015 Earnings Conference Call. Today with us, we have Carlos Fadigas, CEO; Mario Augusto da Silva, CFO; and Roberta Varella, Investor Relations Director.

We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company’s presentation. After brief Braskem remarks are completed, there will be a question-and-answer session, at that time further instructions will be given.

[Operator Instructions] We have a simultaneous webcast that maybe 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 will be answered during the Q&A session may be posted in advance on the website. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996.

Forward-looking statements are based on the beliefs and assumptions of Braskem management and information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstance 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 it in such forward-looking statements. Now I will turn the conference over to Roberta Varella, IR Director. Ms.

Varella, you may begin your conference..

Good morning, ladies and gentlemen. Thank you for participating in another Braskem’s earnings conference call. Today, we will be commenting on our results for the second quarter and first half of 2015.

We would like to remind you that pursuant to Federal Law 11,638 as of 2007, the results presented in today's presentation reflect the adoption of International Financial Reporting Standards. The financial information in today's presentation has been reviewed by independent external auditors.

Now let's go to the next slide, where we will begin our comments. On slide three, we present the highlights of the second quarter of 2015.

The average cracker capacity utilization rate was 93%, it exclude the Rio de Janeiro site whose production limited by the continued feedstock issue, the capacity utilization rate came to 97%, the 5 percentage point expansion over the previous quarter was due to the increase in operational efficiency as a result of process improvement to the past year.

Also contributing to this performance the recovery of part of the competitiveness of naphtha-based crackers worldwide due to its cost improvement in relation to the gas-based crackers and to capture petrochemical sales opportunities in international markets.

The deterioration of Brazilian economic scenario and change in inventory rebuilding in the beginning of 2015 impacted the demand for thermoplastic resins in the second quarter, which totaled 1.2 million tons, 15% down over the same period last year. Braskem’s sales followed this trend and amounted to 792,000 tons.

On the other hand, the physical dynamics of international market and the exchange rate level resulted in an increase in the export sales. Regarding resins, its exports sales totaled 373,000 ton, 53% more than in second quarter of 2014 and 46% up from first quarter of 2015. Polypropylene sales by the U.S.

and Europe business unit reached 493,000 tons, 7% up from first quarter, mainly reflecting improving performance of the U.S. economic, which possibly included demand sectors related to consumer goods given discounted. Braskem record consolidated EBITDA of 2.6 billion real.

This expansion is explained by the operation performance, the improvement of the contribution margin due to the recovery of resins and basic petrochemical spreads in international markets and the depreciation of the Brazilian real.

Thanks to the improvement in cash flow generation capacity, the company leveraged as measured by the net debt to EBITDA ratio in U.S. dollar is stood at 2.27 times, 11% down on the previous quarter and 17% down on the same period of 2014. This was the company’s lowest leverage since 2007.

Construction of the Mexico complex continued to move ahead and was 95% complete at the end of the quarter.

The first steam generation boiler was also inaugurated, which is essential for the functioning of the large turbines on equipment such as compressors and power generator, in line with Braskem committed to sustainable development, [indiscernible] launch this quarter of Braskem Labs, a program encourage company to come up with innovative solutions for recurring problems in modern society to the use of plastics.

Now, let’s go to the next slide, please, on slide four we will discussed the performance of the Brazilian thermoplastic resin market and Braskem sales in the second quarter and first half of 2015.

The Brazilian thermoplastic resins market totaled 1.2 million tons, 15% down on first quarter, which has been positively impacted by the rebuilding of plastic processors inventories and anticipation of product sales volume due to the resin price recovery trend in international market.

Further downward pressure came from slowdown of Brazil’s economic activity and its impact on domestic demand. The exceptions were still those segments related to agro business, which is so vigilantly structurally productive and competitive to meet growing demand from book in relation to second quarter of 2015. Present consumption was 80% now.

Following the Brazilian market trend, Braskem’s sales totaled 792,000 tons in the second quarter of 2015. The company ended the quarter with a market share of 66%. In the first half of the year, the Brazilian thermosplastic resin’s market totaled 2.6 million tons due to in line with the demand in Brazil. Braskem sales were 1.7 million ton.

Moving onto slide five. On slide five, we presented the factors that increased EBITDA in the second quarter of 2015 in comparison with the previous quarter. Consolidated EBITDA totaled 2.6 billion reais. The average U.S.

dollar appreciation generated approximately 5,230 million reais with a positive net revenue impact of 784 million and a negative cost impact of 554 million reais. In U.S.

dollar, EBITDA was $850 million and increased around 70%, mainly reflected with better operating performance and improvement in contribution margin as a result of the recovery of thermoplastic resin and basic petrochemical spreads in the international market. Now, let’s go to slide six.

We present the factors that the influence in EBITDA in the second quarter of 2015 in comparison with same period last year. The 1.5 billion reais. EBITDA expansion is explained by the appreciation of the average U.S.

dollar which generated a positive impact of 930 million reais, positive effect of $2.2 billion in revenue and then negative effect of $2.2 billion on cost with better operation performance, the higher sales volume and the recovery of the Braskem’s resins spread in the international market, which offset the lower basic petrochemical spreads.

Moving onto slide seven. This slide shows Braskem’s debt. Since investment made in the Mexico project by the subsidiary Braskem Idesa is financing under our project finance model, with that, we’ll be using the project’s own cash generation and analyzing the present to exclude this amount.

In this context on June 3, 2015, the company’s gross debt totaled $7.3 million, 2% up on March 31, 2015 in Brazilian reais, however, debt settled by 2% reflecting the impact from the 2% U.S. depreciation. In the end of the period, 73% of gross debt was dollar denominated.

Cash and cash equivalents stood at $1.5 billion as a result and that came to $5.9 billion, grew by 3%. In Brazilian real, net debt remained inside over first quarter of 2015. 75% of net debt was denominated in U.S. dollar.

In line with its liquidity strategy, Braskem also maintains two stand-by credit facilities in the amount of $750 million and 500 million reais which do not include any restrictive covenants on withdrawals during times of adverse market.

EBITDA growth of 16% in the last 12 months had a positive impact on leverage measured by net debt to EBITDA ratio which we improved from 2.55 times to 2.27 times when measured in U.S. dollar but 11% down from the previous quarter. This is the lowest leverage since 2007. Leverage in Brazilian real came to 2.59 times, down by 22%.

On June 30th, the average debt term stood at 16 years considering dollar denominated debt only, the average term was around 21 years. In July, the credit rating agency Standard & Poor’s changed the level of risk outlook stable to negative.

As a consequence, it has also changed the outlook of 21 Brazilian companies, among them Braskem’s outlook from stable to negative.

It’s worth emphasizing that only 4% of total debt factored in 2015 and that the company’s high level of liquidity ensured that it has sufficient cash and cash equivalent to cover the payment of obligations matured in the next 33 months, including the standby credit facilities, this coverage is 46 months Moving on now to the next slide.

Slide eight shows our CapEx in the first half of 2015. Braskem invested 798 million reais in the period or 516 million excluding the Mexican project. Of this total, around 90% or 483 million reais was allocated to this operation, including the investments related to proving operational efficiencies and productivity.

The remainder was allocated to other strategic deposit such as the production of UTEC in La Porte, in United States. Regarding the Mexican project, which is scheduled for operation maybe the end of 2015, Braskem invested $105 million or 282 million reais in the first half of the year. Now let’s go to the next slide.

On slide nine, we will talk about the global scenario and Braskem’s priorities. Reduced growth of the U.S. economy in the first quarter of 2015 led International Monetary Fund to revise its center with GDP growth estimated now for 3.5% to 3.3%.

However, it released that the recovery of economic activity in the developed market, which constitutes one of the main global GDP growth drivers today remains intact.

Regarding China, the GDP outlook expansion will remain the same, growth of 7%, given the policy adopted by the government to reach a more sustainable growth than the risk factors associated with the global economy are related to way the financial market volatility special nature and an impact in the Greek debt negotiation and its potential impact on the Eurozone and world economy.

The Brazilian outlook remains challenging, given the deterioration in the economic scenario, GDP is expected to increase by 1.80%. For the petrochemical industry, the scenario remains positive.

However, with the end of the schedule and unscheduled maintenance shutdowns particularly in Europe and Asia and the consequent movement of production, petrochemical spread in the international market are expected to be narrow than in the second quarter.

The points of attention is related to inflations in Chinese demand, geopolitical issues in the Middle East and North Africa and the recent negotiations to end the on discrepancies models on Iran, which make put further downward pressure on oil prices.

In this context, Braskem’s strategy remains on the developing market, Petrochemical and cost exchange and investment in project designs to diversify the feedstock mix and improve global competitiveness to renew on a competitive basis of the naphtha supply agreement with Petrobras, conclusion of the renewal of the energy contracts we set and completion of the construction of the integrated project in Mexico and its operation will start at the end of 2015.

In line with its commitment to financial healthy and costs discipline, it intends to temporarily put investment driver, internal program to reduce fixed costs, which are on a nominal basis should generate annual savings of between 300 million real and 400 million real product.

That brings us to the end of our presentation and we will now go to the question-and-answer session..

Thank you. [Operator Instructions] It’s Frank McGann from Bank of America in line to make a question..

Yeah. Good afternoon. I was wondering, perhaps two things. One is, as you are looking forward and you are looking at the economy.

Obviously, it’s quite weak and I was wondering how you are seeing overall demand trends as you’ve come through the second quarter or the beginning of the third quarter, how that compares to perhaps what you are original expectations were? And then secondly, with the weaker economy more of your product, potentially can be sold into the export market, I was wondering how you were viewing that as and the potential effect that could have on margins on those products sold as exports versus those in the domestic market?.

Hi, Frank. This is Carlos Fadigas speaking. When we -- talking about demand, when you compare the first half of the year with last year, we are down 1%. But the economic situation in Brazil has -- I would say deteriorated over time.

We started the year with our forecast where the EBIT was close to zero and at this point, the average, the consensus or the average of payment in Brazil is that GDP is going to go down about 2%. So that’s for GDP. As I mentioned to you, we are down 1%, when you compared to first half of this year to the last year.

Our best projection at this point is that demand in Brazil will end the year roughly 2% lower than it was last year. Having said that, over the last weeks, eventually two months but that’s basically last week. The political situation in Brazil has further deteriorated. I wouldn’t say we have a different number.

I just would say that the levels of certainty have increased. We have more uncertainty at this point. What our customers are saying is that they are final customer. Right now are also buying, I would say just amount that’s needed to keep the business running.

So, they also see this uncertainty, the volume and type of disparity and the final demand is also an interest. It varies domestic consumables to consumer’s use. It’s negative throughout also with spectrum.

The agriculture sector in Brazil is an integral part and is still positive one, but apart from that most of the segments are in the negative eventually neutral. So, maybe to wrap up, I would say at higher levels of certainty, negative scenario at this point, loss of demand for resin of roughly 2%.

But we have to keep an eye on that to understand how the political situation will evolve and the competence of that, how the economic situation will evolve, naturally we -- the top priority. Now addressing the second question about export, the top priority is to allocate the products to the domestic markets where we have better results I would say.

The secondary market would be Latin America and then exports to overseas. The growth in exports reflects the readiness to keep the trends improve.

Maybe what I am trying to say is that with the exports, you don’t need last quarter margins lose in Brazil, but it’s still a positive margin and still helps run the plant close to fully capacity as possible.

Having said that, if you think about minus 2, even if you go further to minus 3, minus 4, but if you think about minus 2, it’s not a dramatic change, given what we had last year.

So the dynamic around the spread, the dynamic around the US, the weakening of the Brazilian real is much more important to the result of Braskem, then allocating 2% of what was in one of the store in Brazil should impact quarter. I hope that has answered your question..

Now very clear. Thank you..

[Ms.

Christina Holland] [ph] from HSBC would you like to make question?.

Thank you for the call. And congrats on a great quarter. There’s been some quotes in newspapers talking about the naphtha contracted Petrobras that there was something about 50-50 chance you can get it done by the end of this month or not.

Can you provide us any color on how that’s progressing and any more detail on what Petrobras is asking for versus what you wanted to do, so you can get kind of some idea of how far apart the Petrobras are on terms, I mean, new long-term contract? Thank you..

Well, [Christina] [ph], thank you for the question. Typically we see I think now through the press to either take call or make comments in the SA during the press conference. I actually said, I’d like to avoid given specific chance of signed amount and contract.

So what I said was I would like to avoid say putting a chance on that, so I’d just go with 50-50. So that’s what I said. To give a more color on where we are right now, first of all, [indiscernible] versus Braskem deal and Petrobras deal, they are in constant talk. I myself will be at Petrobras next Monday. We will have a meeting there.

It’s actually to address the naphtha contract. So we are engaged, we are meeting, we are discussing. I see the efforts on both sides not only Braskem, it’s motivated and focused on finding the solution. The Petrobras is doing the same.

We could what we believe should be a creative alternative and the payable is the formula that there is that could go from the initial suggestion was 90% of other prices, Amsterdam rather than an uplift European referenced price, just 210% of that and that would vary with the price of the naphtha.

The higher the price goes the better for the oil producers, the naphtha producers. That was tougher for the buyer. Therefore, there would be a discount. The lower it goes it’s tougher for the naphtha producers and better for the petrochemical companies to pay premium on top of that. So that was our proposal.

Petrobras is seeing the same position they had before. I don’t know how committed you are there, but over time Petrobras claims that they have used roughly half of the naphtha. They used to supply us to add to the gasoline boom and therefore between that to supply the petrochemical sector, they had to import naphtha.

Because of that, their position is that we should compensate them for the cost of fund not in Europe and bringing that to Brazil. That’s a position that we disagree with. We have always been supplied by the naphtha producers locally. We have nothing to do with the growth demand for gasoline in Brazil. That actually grew 70% over the last five years.

It’s rare case of huge demand group of gasoline and that has to do with the price for gasoline to move for actually subsidized in some circumstance for a very long period of time, but just give you some of the background.

So our position is we put some alternative under the table that we feel is created and could accommodate the change in this market over time. So we are to sign the long-term contract, which should formula that could accommodate for different scenarios going forward.

Petrobras position remains one that we should compensate them for the first quarter importing naphtha. We have until the end of this month of August. The current contract, the current expansion of the contract will finish by the end of this month and we haven until the end of the month to come up with the solution.

I do hope we find a solution that will allow us to sign the long-term contract. If we don’t, I think that at a certain point we’ll try to have to face or at least discuss the possibilities of going after another extension. But having said that, we’ve already focused on trying to find a long-term solution.

I hope that had given you some more color about the discussion..

Thank you. And if you don’t mind, can you also clarify -- there is so much news out there on the contract, Petrobras has denied 6 billion number the prosecutor has come up with, but Petrobras -- sorry, I don’t want you speak on the behalf, but they wrote a vague letter saying there was something odd about the contract and they’re investigating it.

Did you know what they were responding to when they said there was something odd about the contract? I think something about a wrong signature. I don’t know if you have more explanation on what maybe going on there..

Yes. The only comments I can’t make because as you know that’s a delicate topic. And on top of that, as you said, I would like to speak on behalf of Petrobras. I’ll tell you what I read through the press and we already see kind of formal knowledge in Brazil.

Petrobras, especially the current officers, the new Board, the new officers, they are pretty disciplined and most of the things that were decided and signed it and gone into press. So we are going through these various spaces. There are no audits about everything that has been done in the past.

This had been very public and all the so called wrongdoing things that shouldn’t have happened and so on. So that’s what we read. My understanding is that one of the analyses they made about the several decision in several quarters was around this naphtha contracts and the information.

We have this debt among all the internal compliance and governance procedures. There were some of them that weren’t properly addressed. That’s all I know. Having said that, the same documents that mentioned the lack of full compliance with governance rules, they also mentioned the same documents.

They also mentioned it’s explicitly and they were not able to find any loss to Petrobras. And on this topic, there is extensive material supporting the conditions at the time of the negotiation and how these contracts did not bring a loss to Petrobras, that’s also part of the document we have access to.

But there several decisions made in the past, they are usually revisited, reanalyze it, scrutinize it and checked against the all the compliance and governance procedures of Petrobras. This contract is one of them..

Okay. Thank you very much..

That’s all I address. Thank you, too..

[Operator Instructions] Next is Pedro Medeiros from Citigroup would like to make a question..

Good afternoon. Thanks for taking the question. Fadigas, this is actually a follow-up to the Portuguese version of the call.

We contemplate about the outlook for demand from China and how the outlook for demand for a number of polymers is working in and how are you seeing this market? But I was wondering if you can talk a bit about what kind of impacts does the startup of a number of our CTO and MTO facilities in China? Do you still preview to start for these year and early 2016 may have on the market.

Can the increase capacity be easily absorbed by the outlook of demand?.

Okay. Pedro, China is actually one of the region in the world where capacity added twice I mean, mainly, if you can talk about polymers, most consist of poly, especially about polyethylene. If you ask Middle East and China, right.

For several years now we have been we have been pricing the adding capacity addition in China and part of chemicals, not only addition in China this whole to all the things China and they usually think about whether they’re going to be adding all these projects whether they will enough water. The water is a right place and so on.

So I’ll confess to you, I’m not an expert in China but what I have learned overtime especially over the last five years is that these huge offers especially in polymers never happened the way that it will forecast it.

It has happened previously in the past some years ago, back in ’06, with [indiscernible] has dampened the operating rate activity were acquired, but never happened in mature way with polyethylene and polypropylene.

So if we are to think about the additions of capacity of ethylene, the forecast for the next several years, starting with ’15 going all the way to ’18, what see actually is that just kind of a balance, actually it start to change typically in polyethylene in more dramatically in ’18 was because of the U.S. not because of China.

But of instance the number we have given idea for this year is an addition of CapEx that is 224. Its 4% in terms of the debt given 24, we had 6 million from the balance sheet. That’s from top of our market 130 million tons. Globally, we are growing 3% a year as we grew slightly above that 4% growth on top of that. We need exactly 5 million.

So that’s why I mentioning as we move forward even with China with this kind of balance of CapEx. China would account roughly [indiscernible] year of capacity, some more for gets it for 18, but if it is now it means it’s not seven model [indiscernible] and that’s already what included in this five eventually 7 million tons per year.

So I do not see China with the 2 million per year that the going to be adding in total of between 5 million and 7 million per year. Before get [indiscernible] 7.3 and then 6.7 million tons in the following year. So we are talking, if not focus balance with growth in demand.

We are talking about eventually 1 million tons additional in top of the market is 430 million ton. So I don’t see that as immature. And to be honest with you, after still back in the last -- lastly, all the tracks with additional capacity coming from Middle East and that never impacted the market at one single high time, didn’t spread overtime.

And I know concerns with China for several years from now has been spread overtime. Project has been cancelled. Projects has been delayed.

Maybe long but one single things that’s do kept us most of our attention on this right side is the United States, because of its discipline, because of its engineering capacity, because of the players that are building this plan.

So I think that the -- yes, we can always have maybe long and always have a surprise coming from China from this right side. But they want single things to kept out of the nation to the U.S. I don’t see this huge rate of polyethylene or even polypropylene come this manage to put some other markets in self position.

They managed to add a huge capacity of PPA and so PPA for instance not going through good time. But not the case with the resins we produced, 204 tons and we remain profit for sometime. So that’s few of your data points on China..

Okay. Carlos, that was very good description. Thank you so much, Fadigas. Once again congratulations for the result..

Thanks..

[Operator Instructions] I will turn over to the company for closing remarks..

So, I'd like to thank you all for participating. We had a very long call in Portuguese. We ended up having a short call in English. I’d like to thank you all who joined us in this call in English. I’ll finish by saying that, I’m glad we had a good operational performance in the second quarter.

It came at the right time, the operational performance because the margins were actually captured. The weaker Brazlian real finally is adding, is bringing back competitiveness to the Brazilian industry to show its true positions.

With better than sales, we were able to add from that and capture the margins for Braskem and reach a record EBITDA in this quarter. As we read it, we also kept working on saying long-term. So the signing of the contract for the [indiscernible] Northeastern Brazil, we are working very hard on that. We hope to have it finalize soon.

So, we are going to have energy contracted until 2037 and so we are going to have someone else to think about in the future, not to this management. And as we work on in the margin, in second part, we also kept focus on the project in Mexico.

So all-in-all, despite the news in Brazil, despite the political environment, economic environment in Brazil, I’m glad to say that the team kept the focus and we delivered good results. Thank you all for participating in the call and I wish you all have a good week..

Thank you. This concludes today's Braskem’s earnings conference call. You may disconnect your lines at this time..