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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2006

(Commission File No. 1-14862 )

 

 
BRASKEM S.A.
(Exact Name as Specified in its Charter)
 
N/A
(Translation of registrant's name into English)
 


Rua Eteno, 1561, Polo Petroquimico de Camacari
Camacari, Bahia - CEP 42810-000 Brazil
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___       Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). _____

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). _____

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ______       No ___X___

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____.


EBITDA grows 82% and reaches R$461 million, the best performance in 2006
Net Revenue reachs R$3.3 billion in the 3Q06, the highest in two years

São Paulo, Brazil, November 8, 2006 --- BRASKEM S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK), leader in the thermoplastic resins segment in Latin America and second largest Brazilian industrial company owned by the private sector, announced today its results for the third quarter of 2006 (3Q06).

The 3Q06 results set forth in this release are derived from Braskem’s consolidated results of operations, and have been compared with Braskem’s results for the third quarter of 2005 (3Q05) or with the second quarter of 2006 (2Q06), as indicated. The consolidated balance sheet, cash flow statement and income statement attached hereto have been subject to a limited review by Braskem’s independent auditors and reflect the elimination of the accounting effects of CVM Instruction 247 (therefore only those investments under Braskem’s direct control are consolidated, and Braskem’s stakes in COPESUL-Companhia Petroquímica do Sul and Petroflex Indústria e Comércio S.A. are recognized through the equity accounting method). These financial statements fully consolidate Politeno Indústria e Comércio S.A. since the 2Q06. Accordingly, this release reflects Braskem’s results of operations for the 3Q06 that include Politeno’s results of operations, as well as pro forma financial information that fully consolidates Politeno’s results of operations for the following periods: 3Q05, 9M05 and 9M06. The pro forma financial information is based on financial statements that have been subject to a limited review by independent external auditors. On September 30, 2006, the real / U.S. dollar exchange rate was R$2.1742 per U.S.$ 1.00.

1 . Highlights 

1.1 EBITDA Margin grows 5.2 p.p.: Braskem presented a 14.1% EBITDA margin in the 3Q06, compared to a 8.9% margin in the 2Q06 and a 12.9% in the 3Q05. This level of profitability confirms the strength of the company´s business model and its capacity to deliver good results in a challenging scenario, evidenced by the high levels of prices for oil and naphtha.

1.2 Economic and Financial Highlights: 

1.3 10% Growth of the Brazilian Thermoplastic Resins Market: the Brazilian thermoplastic resins market (which includes polyethylene - PE, polypropylene - PP and PVC), taking into consideration domestic sales plus imports, grew by 10% in the 9M06, when compared to the 9M05 This performance confirms the strong elasticity of the thermoplastic resins market when compared the GDP. Over the 2Q06, growth in the 3Q06 was 4%.

1.4 100% Completion of the Buy-Back Program: On October, 23, Braskem completed 100% of its share buy-back program launched on May 4, 2006. The Company acquired 13.1 million class “A” preferred shares (PNA) and now holds 14.4 million PNA shares in treasury. From the 13.9 million PNA shares targeted for buy-back, 0.8 million correspond to the shares issued as a consequence of the merger of Polialden into Braskem that were not acquired by minority shareholders of Polialden who exercised their withdrawal rights.

For further information, access our IR website at www.braskem.com.br/ir or contact our IR team: 
 
Luiz Henrique Valverde    Luciana Ferreira 
IRO    IR Manager 
Phone: (+55 11) 3443 9744    Phone: (+55 11) 3443 9178 
luiz.valverde@braskem.com.br    luciana.ferreira@braskem.com.br 


1.5 Innovation and Technology – launch of the first Brazilian resin using nanotechnology:Braskem deposited its 3rd nanotechnology patent in the 3Q06 and announced the launch of the first Brazilian resin using nanotechnology, a PP application, on November 6, 2006. The expected production capacity amount to 10 thousand tons, and will be available to attend the automotive, electronic, and home appliances markets. This new resin is characterized as a lighter product, with greater heat resistance as well as greater protection to the sun light and to humidity. The Company has a team dedicated to research in this area, in line with its strategy of expanding its portfolio of higher value-added products.

1.6 “Fórmula Braskem” – Successful implementation: On October 1, 2006, Braskem successfully started up its new integrated management system, “Fórmula Braskem”. As a result, beginning in 2007, the Company expects to capture efficiency and productivity gains derived from (1) systems integration, (2) a more efficient decision-making process and (3) from a comprehensive review of business processes, that occurred throughout the implementation of the project. Braskem invested R$ 130 million in this project and the company expects to capture, as of next year, R$ 260 million gains as net present value.

1.7 Successful new financial transactions in local and international markets: in order to improve even more its debt profile and further reduce its cost of capital, Braskem concluded three important financial transactions in September:

1.8 Petroquímica Paulínia – project within schedule: the construction of the PP unit in Paulínia proceeds according to the initially planned schedule. The final construction permit was obtained. The foundations and the land scraping have already been initiated, the critical equipment has already been acquired and the process of technology transfer from Braskem to Petroquímica Paulínia was intensified in the 3Q06 specially in the engineering and human resources areas, with the training of technical personnel.

1.9 Corporate Governance obtains international recognition: According to GMI -GovernanceMetrics International, Braskem was one of the two companies with the highest corporate governance rating among Brazilian companies, scoring 6.0, 40% above the average for emerging market companies, which was 4.3, and 88% above the 3.2 average for the Brazilian companies.

2. Operational Performance 

Braskem’s operating strategy is based on the optimization of the use of its asset base with the maintenance of high capacity utilization rates in all of its Business Units. During the 3Q06, the Company had a record PP capacity utilization rate of 104% and its PE plants located in the Triunfo Complex (in the state of Rio Grande do Sul) also presented utilization rate above 100%. The ethylene capacity operating rate was impacted by operational restrictions in the olefins I plant (ethylene/propylene) in September. The PE (plants in the Camaçari Complex) and PVC capacity utilization rates have also been consequently impacted. These problems have already been solved and the plants are now operating normally. Yet, the resin production volumes in the 3Q06 were the highest ever registered by the company, which demonstrates improved reliability and adequate management of the industrial facilities.

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The production capacity utilization rates of Braskem’s key products are shown as follows:

Production volumes of the Polyolefins Business Unit increased by 2% compared to both 2Q06 and the pro-forma production volume recorded in the 3Q05, due to the plants’ improved productivity. The production capacity utilization rates reached 104% for PP and 92% for PE in the 3Q06, thus maintaining capacity at high rates.

PE debottlenecking was concluded at the end of the 3Q06, thus adding 30,000 tons of additional production capacity of higher value added PE, notably Braskem Flexus®.

In the Vinyls Business Unit, the production capacity utilization rate of its principal product, PVC, was 87% in the 3Q06. Despite the increase when compared to the 2Q06 – when a scheduled shutdown occurred in May – the capacity utilization rate was impacted by the reduced production in the ethylene plant. PVC production volumes increased by 12% compared to the last quarter and fell by 1% compared to the 3Q05.

Braskem is already prepared to increase its annual production capacity of PVC by 150,000 tons, of which 70,000 tons will be produced in the Camaçari plant and 80,000 tons in the Alagoas plant. The projects will be implemented according to market needs. The growth potential presented by the housing and infrastructure construction markets for the upcoming years is already a positive signal.

In the 3Q06, the Basic Petrochemicals Business Unit, considering the production of its key products, ethylene and propylene, recorded a 2% and 6% decrease, compared to the 2Q06 and to the 3Q05, respectively, due to operational restrictions in Olefins I plant in September 2006. In the 9M06, production dropped 5%. On the other hand, the production of aromatics climbed 7% in the 3Q06 compared to the same period of last year.

Production Volume 
 
3Q06 
 
2Q06 
 
3Q05 
 
Chg.% 
 
Chg.% 
 
9M06 
 
   9M05 
 
Chg.% 
(tons)
 
(A)
 
(B)
 
(C)
 
(A)/(B)
 
(A)/(C)
 
(D)
 
(E)
 
(D)/(E)
 
Polyolefins Unit                                 
   . PE´s - Polyethylene*   
288,931 
290,983 
290,567 
(1)
(1)
848,624 
853,609 
(1)
   . PP - Polypropylene   
146,303 
135,155 
136,308 
8 
7 
402,894 
395,923 
2 
   . Total (PE´s + PP)  
435,234 
426,138 
426,874 
2 
2 
1,251,518 
1,249,532 
0 
 
Vinyls Unit   
   . PVC - Polyvinyl Chloride   
112,789 
100,332 
113,671 
12 
(1)
322,540 
339,870 
(5)
   . Caustic Soda   
118,222 
95,782 
111,983 
23 
6 
326,306 
349,889 
(7)
 
Basic Petrochemical Unit   
   . Ethylene   
272,602 
275,103 
285,214 
(1)
(4)
831,341 
876,081 
(5)
   . Propylene   
127,539 
133,054 
142,345 
(4)
(10)
395,961 
419,042 
(6)
   . BTX**   
162,089 
168,221 
151,769 
(4)
7 
478,027 
502,525 
(5)
 
 
*Includes 100% of Politeno 
**BTX - Benzene, Toluene, Ortho-xylene and Para-xylene 

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3 . Commercial Performance 

Considering the domestic sales plus imports, the Brazilian thermoplastic resin market grew by 10% in the 9M06 compared to the 9M05 During the same period, the domestic PE, PP and PVC markets grew by 9%, 13% and 7%, respectively. These markets grew by 3%, 5% and 6%, respectively, in the 3Q06 compared to the 2Q06.

Braskem sold a total of 549,000 tons of thermoplastic resins in the 3Q06, considering the domestic sales plus imports in the 3Q06, which represented a 5% growth when compared to the 524,000 tons sold in the 2Q06. In the domestic market, the volume reached 416,000 tons in the 3Q06, a 5% growth over the 2Q06. Exports grew by 3%, reaching a total of 133,000 tons of thermoplastic resins. Braskem’s total sales volumes of thermoplastic resins increased by 5% compared to the 2Q06 sales volume of 524,000. When compared to 3Q05 pro-forma volume, sales fell by 6%, once the Company recorded an atypical high sales volume in the 3Q05.

Sales Volume 
 
3Q06 
 
2Q06 
 
3Q05 
 
Chg.% 
 
Chg.% 
 
9M06 
 
   9M05 
 
Chg.% 
(tons)
 
(A)
 
(B)
 
(C)
 
(A)/(B)
 
(A)/(C)
 
(D)
 
(E)
 
(D)/(E)
 
Polyolefins Unit                                 
   . PE´s - Polyethylene*   
284,542 
285,048 
306,029 
(0)
(7)
826,253 
863,976 
(4)
   . PP - Polypropylene   
147,935 
135,344 
148,871 
9 
(1)
404,899 
396,339 
2 
   . Total (PE´s + PP)  
432,477 
420,392 
454,900 
3 
(5)
1,231,151 
1,260,314 
(2)
 
Vinyls Unit   
   . PVC - Polyvinyl Chloride   
116,606 
103,670 
127,050 
12 
(8)
332,020 
337,377 
(2)
   . Caustic Soda   
107,190 
101,189 
115,583 
6 
(7)
313,730 
343,550 
(9)
 
Basic Petrochemical Unit   
   . Ethylene   
52,477 
58,382 
60,001 
(10)
(13)
169,345 
184,726 
(8)
   . Propylene   
116,610 
106,186 
107,438 
10 
9 
338,830 
358,687 
(6)
   . BTX**   
137,794 
131,442 
136,140 
5 
1 
387,903 
443,751 
(13)
 
 
*Includes 100% of Politeno 
**BTX - Benzene, Toluene, Ortho-xylene and Para-xylene 

In the Polyolefins Business Unit, sales volumes of PE both domestically and in the export market, remained flat, compared to the 2Q06. Domestic sales volumes of PP increased by 7% in the 3Q06 compared to the last quarter and by 14% compared to the same period of 2005. Export sales volume of PP increased by 23% in the 3Q06 compared to the 2Q06.

The integration with Politeno has allowed Braskem to enhance its commercial strategy for PE and to offer an even more diversified portfolio of products and services to its customers, thus increasing the competitiveness in the production chain and adding value to Braskem´s customers.

In the Vinyls Business Unit, PVC domestic sales volumes increased by 15% when comparing to the 2Q06 and to the 3Q06, above market growth performance, caused mainly by the increase in the construction and footwear industries. Total sales increased by 12% over the 2Q06 and fell by 8% over the 3Q05.

In the Basic Petrochemicals Business Unit, ethylene sales volumes dropped 10% quarter-on-quarter. Propylene sales, which had been reduced in the 2Q06, returned to the levels recorded in the previous quarters. Total sales volumes of aromatics increased by 5% compared to the 2Q06, primarily as a result of increased export sales.

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4 . Competitive Management 

4.1.  

The purpose of “Braskem +”, a program created in 2004, is to position Braskem among the world’s most competitive petrochemical companies. This program also represents an important and additional potential for productivity gains for Braskem, estimated to total R$420 million on annual and recurring basis once the program is completed. “Braskem +” is structured to increase Braskem’s ability to create value in all stages of the petrochemical cycle.

The results achieved through the end of 9M06 represented gains amounting to R$359 million, on an annual and recurring basis, a figure that the Company had estimated to reach at the end of 2006. Braskem expects to accomplish the R$420 million estimated for the end of the program by December 2006, a year ahead of the original schedule.

The benefits of the “Braskem +” program are reflected in all of the Braskem’s units and include, for example:


4.2.   

Since October 2005, Braskem has been working on the implementation of a new integrated management system denominated “Fórmula Braskem”, which is based on the SAP platform. This new system commenced operations on October 1, 2006 after one year of implementation, during which a team composed of 110 professionals revised all the Company’s business processes. The key factors for the successful implementation of this project were the management of change process, synergies within all areas of the Company, intense technical support during start-up and the alliance established by SAP, Braskem and Accenture. Braskem invested R$130 million and it expects to capture R$260 million as a net present value of the cash flow of the project as of the next year, that will derive from cost reduction associated to the streamlining of business processes and improved management of the businesses.

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5 . Financial and Economic Performance 

5.1. Net Revenue

The demand for thermoplastic resins remained high in the 3Q06, with the domestic market recovering its historical levels of elasticity in relation to the GDP, leveraged by the growth of the Brazilian economy and the higher per capita income. Therefore, higher prices in the domestic market, combined with higher sales volumes, especially for PP and PVC, caused the Company to record a net revenue of R$3.3 billion in the 3Q06, which represented a 16% increase compared to the net revenue in the 2Q06.

When expressed in U.S. dollars, Braskem’s net revenue in the 3Q06 was US$ 1.5 billion, 16% higher than the last quarter and 21% higher than its pro-forma net revenue in the 3Q05 (US$ 1.2 billion).

Braskem’s commercial policy is to align the prices of its products sold domestically with international prices on a consistent basis. Thus, in the 3Q06, thermoplastic resin prices grew by 10% in the domestic market when compared to the previous quarter. Ethylene and propylene prices also had a considerable increase, moving up 16% for both products, in line with the prices upward trend registered in the European market.

As a result of the price increases implemented in the domestic market in the


6


3Q06, resin prices presented the following behavior:

Domestic and international prices for BTX (benzene, toluene and xylenes), in R$/ton, increased by 31%, when compared to the previous quarter primarily due to higher international benzene prices, which increased by 23% from June to September.

5.1.1 – Exports

Braskem maintains its long term commitment to its clients and strategic markets. As such, the company is investing in the development of a direct relationship with its international clients. In line with this commercial strategy, Braskem started up commercial and marketing operations in Europe based in Rotterdam (the Netherlands). Such operation follows the same existing business model as in the current operations in the US, where the Company has a branch in Delaware, Braskem America, and in Argentina, Buenos Aires. In order to proceed with the feasibility studies of the strategic projects in El Tablazo and Jose Complex, the Company opened an office in Caracas, Venezuela.


The Company’s net export revenue reached US$ 396 million in the 3Q06, 14% higher than the US$ 348 million recorded in the previous quarter. In the 9M06, exports reached US$1 billion and already outperformed the export figure for the whole year of 2005.

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5.2. Cost of Good Sold (CoGS)

During the 3Q06, Braskem’s cost of goods sold (CoGS) was R$2.7 billion, 8% higher than the 2Q06 and 11% above the pro-forma CoGS in the 3Q05. Braskem’s 3Q06 CoGS was impacted in US$ 123 million, when compared to the 3Q05, by the 14% increase in the price of purchased naphtha, as a result of significant increases in oil prices. In addition, Braskem’s CoGS increased by US$ 4 million due to higher utilities costs (electricity, gas, steam, fuel oil and others). The 7% appreciation of the real against the U.S. dollar between the periods partially offset the impact of the above mentioned effects.

The average ARA (Amsterdam-Rotterdam-Antwerp) price of naphtha was US$ 595 per ton in the 3Q06, representing a 14% increase compared to the 3Q05 as previously mentioned, and in line with the previous quarter. This increase had an impact of R$208 million in the cost of naphtha, or +17%, in the 3Q06 compared to the 3Q05. The total cost of ethylene/propylene purchased from Copesul increased by 19%, or R$89 million, in the 3Q06 compared to 3Q05.

8

During the 3Q06, Braskem purchased 1,014 thousand tons of naphtha and condensate, of which 774,000 tons (76%) were purchased from Petrobras, its major raw material supplier. The remaining 239,000 tons (24%) were imported directly by the Company, primarily from Northern African countries. Braskem acquired approximately 28% of the naphtha that was imported in the 3Q06 from PDVSA.

Due to the effectiveness of Provisional Measure 255 (MP 255) in March 2006, Braskem recorded a credit in the amount of 3.65% of the naphtha that is purchased (which percentage credit reflects the difference between the amount credited and debited by the Brazilian government in respect of PIS/COFINS). During the 3Q06, this tax credit positively affected Braskem’s CoGS by approximately R$66 million. In the first nine months, this impact reaches R$152 million.


 

Depreciation and amortization costs during the 3Q06 totaled R$139 million, 6% lower than the R$147 million in depreciation and amortization costs recorded in the 2Q06, and 30% higher than in the 3Q05 pro-forma cost. These increases were primarily due to the start-up of projects that Braskem concluded in 2005 and in the 1H06 and changes to the period over which programmed maintenance shutdown costs may be depreciated. As of January 2006, in compliance with IBRACON’s Technical Interpretation No. 01/2006, Braskem is capitalizing costs incurred in scheduled maintenance shutdowns (i.e., recording these costs as an increase in fixed assets, as opposed to deferring these costs). The costs of these shutdowns may be depreciated until the commencement of the immediately succeeding scheduled maintenance shutdown, impacting the amount to be depreciated.

5.3. Selling, General and Administrative Expenses (SG&A)

Braskem is focused on maintaining its costs and expenses in competitive levels. Braskem’s general and administrative expenses totaled R$215 million in the 3Q06, in line with the 2Q06. In the 3Q06, the main impacts were: (i) general and administrative expenses related to the restructuring of the Polyolefins Business Unit as a result of the integration of Politeno (a R$6 million impact); (ii) costs of consulting services associated with the new financial transactions implemented in the 3Q06 (a R$3 million impact) and (iii) provision for doubtful accounts (a R$10 million impact).

5.4. EBITDA

Braskem’s EBITDA totaled R$461 million in the 3Q06, an 82% growth when compared to R$253 million in the 2Q06. When expressed in U.S. dollars, Braskem’s EBITDA in the 3Q06 totaled US$ 212 million, compared to US$ 116 million in the 2Q06.

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EBITDA margin reached 14.1% in 3Q06, a 5.2 percentage points (pp) improvement compared to na EBITDA margin of 8.9% in 2Q06 and a 1.2 pp growth compared to the 12.9% in EBITDA margin during 3Q05. This result derives from better selling prices and volumes in 3Q06.

When compared to 3Q05, EBITDA growth reached 23% due to the alignment of resin and aromatics prices to those of international markets and partially offset by the significant increase in naphtha prices, Braskem´s major raw material, as well as increased costs of ethylene and propylene acquired from Copesul, in line with the increase in international oil prices and in energy costs (electricity, natural gas and fuel oil).

5.5. Investments in Subsidiaries and Associated Companies

In the 3Q06, Braskem’s results from investments in subsidiaries and associated companies totaled R$36 million, compared to R$45 million in the 2Q06, excluding the amortization of goodwill derived primarily from Braskem’s investments in Copesul and Petroflex.

(R$ thousand)                    
 
Investments in Subsidiaries and Associated Companies     3Q06    2Q06    3Q05    9M06    9M05 
         
 
Subsidiaries - Equity Method    121    (833)   543    (713)   (2,992)
Associated Companies - Equity Method    35,520    42,929    23,781    140,950    150,881 
. Copesul    31,934    37,672    37,212    130,720    144,738 
. Others    3,587    5,257    (13,432)   10,230    6,141 
Exchange Variation    447    (366)   908    229    12,549 
 Others    371    3,729    3,603    2,599    18,733 
                     
Subtotal (before amortization)   36,460    45,460    28,836    143,065    179,172 
Amortization of goodwill/negative goodwill    (22,674)   26,024  *  (38,144)   (35,083)   (114,279)
 
                     
TOTAL    13,786    71,484    (9,308)   107,982    64,893 
                     
* Includes R$ 53 million of Polialden's negative goodwill write-off, as a consequence of its merger into Braskem         

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5.6. Net Financial Results

Braskem’s net financial result in the 3Q06, excluding the effects of foreign exchange rate and monetary variations, was an expense of R$226 million, 46% higher than in the 2Q06, when it reached R$156 million.

The following graph presents the main impacts associated with this variation, of which we highlight: (i) R$ 29 million in expenses (commissions, taxes, fees, etc) related to new financial transactions implemented in September, as mentioned before; (ii) R$ 29 million related to a higher portion of the Company’s cash position invested in R$/CDI, with impacts on monetary variation, resulting in a reduction in interest income.

(R$ million)                    
    3Q06    2Q06    3Q05    9M06    9M05 
Financial Expenses    (359)   (302)   (7)   (645)   52 
     Interest / Vendor    (120)   (112)   (121)   (355)   (387)
     Monetary Variation    (66)   (61)   (59)   (185)   (178)
     Foreign Exchange Variation    (49)   (39)   246    212    836 
     CPMF/IOF/Income Tax/Banking Expenses    (39)   (29)   (26)   (88)   (81)
     Other    (85)   (62)   (46)   (230)   (137)
Financial Revenue    29    51    (109)   (22)   (281)
     Interest    18    46    40    102    90 
     Monetary Variation    12    4    3    18    10 
     Foreign Exchange Variation    (1)   1    (151)   (143)   (381)
 
                     
Net Financial Result    (330)   (252)   (116)   (668)   (229)
                     

(R$ million)                    
    3Q06    2Q06    3Q05    9M06    9M05 
 
                     
Net Financial Result    (330)   (252)   (116)   (668)   (229)
 
                     
 
Foreign Exchange Variation (FXV)   (50)   (38)   95    69    455 
Monetary Variation (MV)   (54)   (57)   (57)   (167)   (168)
 
                     
Financial Result less F/X and MR    (226)   (156)   (154)   (570)   (515)
                     

5.7. Net Income

Braskem recorded a net income of R$4 million in the 9M06, and a net loss of R$65 million in the 3Q06, compared to net loss of R$54 million in the 2Q06.

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5.8. Free Cash Flow

The operating cash flow before changes in working capital totaled R$377 million in the 3Q06, compared to R$142 million in the 2Q06, primarily due to the improved operating performance evidenced by the higher EBITDA. Furthermore, Braskem’s additional working capital needs for the period totaled R$254 million. An increase in marketable securities, in the amount of R$320 million was the key factor for this result. According to the accounting criteria, securities with liquidity of more than 90 days can not be recorded as cash or cash equivalent but instead must be accounted as marketable securities. The allocation of resources in such securities aim at obtaining improved financial yields.

R$ million    3Q06    2Q06    3Q05       9M06    9M05    9M06 
                       
REAL* 
Operating Cash Flow before working capital    377    142    297    809    1,393    793 
 
Working Capital Variation    (254)   (142)   (204)   (697)   290    (683)
 
Operating Cash Flow    123    0    92    112    1,684    110 
 
Interest paid    (169)   (93)   (113)   (337)   (255)   (337)
Investment Activities    (336)   (463)   (320)   (973)   (646)   (963)
Share Buy-back    (78)   (57)     (135)          -    (135)
 
Free Cash Flow (FCF)   (460)   (613)   (341)   (1,334)   782    (1,325)
 
Taxes paid        17    14    39    13 
 

Working Capital Variation    3Q06    2Q06 
 
Suppliers         115   
Inventories    82    (6)
Accounts Receivable    (82)   (87)
Marketable Securities    (320)   (11)
Others    (49)   (45)
                                   Total    (254)   (142)
 
 

5.9 - Capital Structure and Liquidity

Braskem has a financial policy approved by its board of directors that requires the maintenance of a minimum amount of cash compatible with the average total monthly cash outlays and the maturities of its short-term financial obligations. On September 30, 2006, Braskem’s cash and cash equivalents totaled R$1.6 billion, superior to the minimum R$1.2 billion established in its financial policy.

Braskem currently has sufficient resources in U.S. dollar to cover foreign exchange denominated payments due over the next 24 months. Such coverage is comprised of cash balances that have been invested in U.S. dollar instruments, foreign currency generated from its estimated net export sales and, when necessary, derivative instruments that protect it from exchange rate fluctuations.

Braskem is continuously focusing on (1) increasing its average debt maturity with the consequent longer-term maturity profile, (2) reducing its cost of debt, (3) becoming more efficient in allocating funds for its working capital needs, and (4) reducing its foreign exchange rate exposure. As of the end of the 3Q06, Braskem had 46% of its debt denominated in U.S. dollars, compared to 56% at the end of the 3Q05.

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Braskem’s cash and cash equivalents amounted to R$1.6 billion on September 30, 2006, compared to R$1.3 billion on June 30, 2006.


Braskem’s net debt at the end of the 3Q06 was R$4.8 billion, compared to the R$4.6 billion recorded in the previous quarter. When expressed in U.S. dollars, Braskem’s net debt was US$ 2.2 billion in the 3Q06, compared to US$ 2.1 billion in the 2Q06. The increase in net debt is due to the increase in working capital needs and to the share buy-back program.

Braskem’s financial leverage, measured by its net debt/EBITDA (LTM) ratio, decreased from 2.97 on June 30, 2006 to 2.96 on September 30, 2006.


Braskem’s average debt maturity at the end of the 3Q06 is of 16 years. Excluding the convertible debentures due in 2007, Braskem’s current annual average debt maturities are below US$ 200 million, which Braskem believes to be consistent with its cash flow.

13

The following graph shows Braskem’s amortization schedule as of September 30, 2006.

6. Investments 

In the 9M06, Braskem’s capital expenditures, totaled R$590 million (does not include capitalized interest in an aggregate amount of R$62 million), compared to R$518 million in the 9M05. These investments were made in projects with attractive returns, as well as on the programs “Braskem +” and “Fórmula Braskem” and were allocated to operational (including the PE debottlenecking), technological, health, safety and environmental areas, benefiting all of Braskem’s business units.


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The variation in capital expenditures when comparing both periods is primarily due to investments in the Basic Petrochemicals Unit - in the expansion of isoprene production capacity scheduled to be completed in November, with addition of 9,000 tons or 50% to existing production. Additionally, investments in Fórmula Braskem program also affected this variation.

In addition to these investments, Braskem disbursed R$107 million in scheduled maintenance shutdowns, in order to maintain the high levels of operational reliability of Braskem’s plants.

7. Politeno – Main Figures 

Politeno’s integration process was successfully completed and Braskem has already begun to capture the expected synergies initially estimated at a net present value of US$ 110 million. Through September 2006, the Company had already captured US$2.5 million in synergies, net of integration costs. On an annual and recurring base, the Company has already captured gains in the amount of US$16.8 million. Braskem is working to merge Politeno into itself in the second quarter of 2007, when it is expected that these gains will be accelerated and therefore fully achieved by the end of 2007.

Politeno’s sales volume totaled 80,000 tons of PE and EVA in the 3Q06, 7% up on the previous quarter, and 73% of the sales volume were derived from domestic sales. As it was the case in other Braskem´s PE plants, domestic prices of Politeno’s PE increased by 4%, in R$/ton. As a result of improved sales performance, Politeno’s EBITDA totaled R$9 million in the 3Q06.

Politeno has a low financial leverage, with net debt totaling approximately R$31 million, R$47 million less than in the previous quarter due to amortizations during the period.

7.1 Economic and Financial Highlights 

Politeno - Highlights    3Q06    2Q06    Var %    9M06 
 
Production Volume (ton)   80,906    86,693    -7%    252,857 
Sales Volume (ton)   79,923    74,779    7%    241,102 
Financial Performance (R$ MM)                
    Net Revenue    259    229    13%    766 
    EBITDA      (4)     21 
    EBITDA Margin    3%    -2%      3% 
    Net Income    (3)   (11)   -73%    (6)
    Net Debt    31    78    -60%    31 
                 

8 . Capital Markets and Investor Relations 

Braskem’s class “A” preferred shares traded on the BOVESPA (“BRKM5”) closed the quarter at R$13.53 per share. Braskem’s ADR (BAK) closed the quarter at US$12.59 per ADR.

On September 1, 2006, Bovespa announced Ibovespa’s theoretical portfolio valid for the period between September and December 2006. Braskem remains amongst the 10 most liquid companies on the Bovespa, with a 2.42% share of the total traded volume. Braskem accounted for 76% of all the volume traded in the petrochemical industry on the Bovespa.

Braskem’s publicly traded shares and class “A” preferred shares reached approximately 50.3% and 67.6% of its total share capital (“Free-Float”), respectively, and the liquidity of the shares on the BOVESPA and the NYSE remained in significantly high levels over the last quarters.

The daily volume of Braskem’s class “A” preferred shares traded on the BOVESPA (BRKM5) increased from 1.4 million shares in 3Q05 to 1.7 million in 3Q06. In the same period, the financial trading

15

volume dropped by 31%, from an average of R$31.1 million traded per day on average in 3Q05 to R$21.5 million traded per day on average in the 3Q06, reflecting the reduction of Braskem’s share price. The average daily trading volume of Braskem’s ADRs (BAK) on the NYSE fell 56%, from US$ 5.0 million per day in the 3Q05 to an average of US$ 2.2 million per day in the 2Q06.

In September, Braskem was one of the two companies with the highest corporate governance rating among Brazilian companies, according to GovernanceMetrics International. In a scale from 1 to 10, Braskem scored 6.0, 40% above the 4.3 average for emerging markets and 88% above the 3.2 average for the Brazilian companies analyzed.

On October 23, 2006, Braskem completed the share buy-back program launched on May 4, 2006. Braskem acquired 13.1 million class “A” preferred shares (PNA) and now holds 14.4 million PNA shares in treasury.

On the same date, Braskem, once again, hosted a meeting with investors at the NYSE, where it presented its strategic growth plans and restated its commitment to transparency and full disclosure to the capital markets. On that day, the Company’s executives participated in the NYSE’s opening bell ceremony (trade start-up).

Stock Performance - BRKM5    9/30/05    12/31/05    3/31/06    6/30/06    9/30/06 
Closing Price (R$ per share)   21.87    18.07    15.96    13.29    13.53 
Return in the Quarter (%)   18    (17)   (12)   (17)  
Accumulated Return (%)*    750    603    521    417    426 
Bovespa Index Accumulated Return (%)*    180    197    237    225    223 
Average Daily Trading Volume (R$ thousand)   31,059    25,489    26,921    24,256    21,513 
Market Capitalization (R$ million)   8,100    6,694    5,912    4,923    5,012 
Market Capitalization (US$ million)   3,645    2,860    2,721    2,274    2,305 
ADR Performance - BAK    9/30/05    12/31/05    3/31/06    6/30/06    9/30/06 
Closing Price (R$ per ADR)   20.72    16.21    14.91    12.19    12.59 
Return in the Quarter (%)   23    (22)   (8)   (18)  
Accumulated Return (%)*    1,156    882    804    639    663 
Average Daily Trading Volume (US$ thousand)   5,011    3,927    4,881    3,032    2,212 
Other Information    9/30/05    12/31/05    3/31/06    6/30/06    9/30/06 
Total Number of Shares (million)   362,524    362,524    362,524    >370,402    370,402 
           
. Common Shares (ON) - BRKM3    120,860    120,860    120,860    123,492    123,492 
           
. Preferred Shares Class "A" (PNA) - BRKM5    240,860    240,860    240,860    246,107    246,107 
           
. Preferred Shares Class "B" (PNB)   803    803    803    803    803 
           
 (-) Shares in Treasury (PNA) - BRKM5    (467)   (467)   (467)   (4,471)   (11,163)
           
= Total Number of Shares (ex Treasury)   362,056    362,056    362,056    365,931    359,239 
 
ADR (American Depositary Receipt)  
1 ADR = 2 BRKM5 shares 
           
* Accumulated return since the market closing on December 30, 2002.                 
Source: Economática/Braskem                     

9. Outlook 

Braskem expects that the economic growth experienced so far will be sustained during the 4Q06 as well as in 2007, which should positively affect its sales performance for the thermoplastic resins. If GDP growth reaches 3%, as expected, thermoplastic resins market should grow between 8% and 12%, from 300,000 to 450,000 tons. Braskem should substantially benefit from this growth since it is the market leader, holding a market share of approximately 43%, and may reallocate part of its exports to the domestic market, where profitability is higher than those in the export market.

With respect to prices for its thermoplastic resins, Braskem will maintain its policy of privileging profitability in the sale of its products, providing high value-added services to its customers supported by a differentiated structure of Innovation and Technology. This strategy has allowed Braskem to maintain over time domestic prices for PE, PP and PVC that are higher than international prices. In the 3Q06, these spreads had an important recovery compared to the 2Q06 due to the successful


16

realignment of prices in the domestic market. For the 4Q06, Braskem will keep its efforts in realign its domestic prices to international prices aiming at additional profitability improvement.

For 2007, the Company believes that the global market for thermoplastic resins should continue to present a higher growth rate in demand than in supply, with sustainable high international prices.

Braskem’s principal raw materials are naphtha, which is used by its Basic Petrochemicals Business Unit, and ethylene and propylene, both of which are acquired from Copesul and used in Braskem’s second generation plants in the Southern Petrochemical Complex in Triunfo. These raw materials represented 75% of Braskem’s CoGS in the 3Q06, and the cost of these raw materials is closely linked with the price of oil.

As of September, oil prices, and consequently, naphtha prices presented a strong reduction in international markets, signaling an important reduction in Braskem’s 4Q06 COGS. For 2007, estimates from oil&gas analysts show lower average prices for oil when compared to the average for 2006, with potential positive effects on both domestic and international petrochemical industries.

In order to take advantage of the lower oil prices scenario for 2007, Braskem decided that the maintenance shutdown in the Olefinas I unit, initially scheduled for the third quarter of 2007, will be divided into two periods: a mini 10-day shutdown in December 2006, so that Braskem will interrupt ethylene and propylene production in this unit in a month when the impact on resin sales is potentially lower due to the seasonality of the period. In addition to that, the Company has inventories to prevent the shutdown from affecting its clients’ operations in the period. The full 30-day shutdown was postponed to 2008.

Consistent with its strategy to maintain its leadership in the regional thermoplastic resins market, Braskem is investing, together with Petrobras, in the construction of a new polypropylene plant in Paulínia, São Paulo with an annual production capacity of 350,000 tons. The start-up of operations is scheduled for the first quarter of 2008 (with initial annual estimated production of 300,000 tons). Braskem holds a 60% stake in Petroquímica Paulínia.

Braskem expects to capture gains of R$420 million on annualized and recurring basis until the end of 2006 with the full implementation of the “Braskem +” program. These results will derive from productivity gains obtained through improved efficiency and higher operational reliability in the production facilities of the company. In addition, the project “Fórmula Braskem”, whose net present value is R$260 million, became operational in October 2006.

One of Braskem’s strategic drivers is the production and sale of petrochemical products at globally competitive costs. Accordingly, , Braskem is analyzing, together with Pequiven, the construction of a polypropylene plant in El Tablazo, Venezuela, with an annual production capacity of 400,000 tons. The expected investments for this plant total US$ 370 million, and this plant is expected to commence operations by the end of 2009. Also in Venezuela, Braskem is at an advanced stage in analyzing the construction of a new “cracker” to produce ethylene with natural gas, together with the integrated production of polyethylene and other second generation products in the Jose Complex. The basic premise for constructing this complex is that it would become competitive with low-cost producers located in the Middle East. The project is a joint venture between Braskem and Pequiven and is currently in the technical and economic feasibility study stage. To meet the work demands of these projects, Braskem has begun to mobilize working groups for each project and is opening a branch office in Venezuela to oversee these investments and move them forward.


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10 . List of Exhibits 

    Page 
 
EXHIBIT I –  Consolidated Income Statement  19 
EXHIBIT II –  Consolidated Balance Sheet  20 
EXHIBIT III – Reconciliation of Shareholders’ Equity and Net Income  21 
EXHIBIT IV –  Consolidated Cash Flow  22 
EXHIBIT V –  Sale Volumes – Domestic Market  23 
EXHIBIT VI –  Sale Volumes – Export Market  24 
EXHIBIT VII –  Net Revenue - Domestic Market  25 
EXHIBIT VIII – Net Revenue - Export Market  26 

 

Braskem, a world-class Brazilian petrochemical company, is the leader in the thermoplastic resins segment in Latin American, and is the second largest Brazilian industrial company owned by the private sector. The company operates 14 manufacturing plants located throughout Brazil, and it has an annual production capacity of 6.1 million tons of petrochemical and chemical products.

FORWARD-LOOKING STATEMENT DISCLAIMER

This press release contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Braskem and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements.

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the risks and uncertainties set forth from time to time in Braskem's reports filed with the United States Securities and Exchange Commission. Although Braskem believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to Braskem’s management, Braskem cannot guarantee future results or events. Braskem expressly disclaims a duty to update any of the forward-looking statements.



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EXHIBIT I
Consolidated
Income Statement (1)

(R$ million)

Braskem S.A. (Consolidated)                  
Income Statement  3Q06
(A)
2Q06
(B)
3Q05 (C) Chg. (%) (A)/(B) Chg. (%) (A)/(C) 9M06 (D) 9M05 (E) Chg. (%) (D)/(E)   9M06 REAL*
Gross revenue  4,183  3,650  3,800  15  10  11,351  11,810  (4) 11,258 
Net revenue  3,277  2,832  2,909  16  13  8,837  9,078  (3) 8,744 
Cost of goods sold  (2,742) (2,531) (2,463) 11  (7,597) (7,131) (7,546)
Gross profit  535  302  446  77  20  1,240  1,948  (36) 1,198 
Selling expenses  (83) (83) (77) (1) (248) (234) (227)
General and Administrative expenses  (132) (133) (120) (0) 10  (378) (363) (372)
Depreciation and amortization  (99) (102) (75) (3) 31  (284) (271) (281)
Other operating income (expenses) 21  18  (86) (83) 115  33  254  116 
Investments in Associated Companies  14  71  (9) (81) 108  65  66  109 
   .Equity Result 
36  45  29  (20) 26  143  179  (20) 144 
   .Amortization of goodwill/negative goodwill  (23) 26  (38) (41) (35) (114) (69) (35)
Operating profit before financial result  238  76  183  211  30  554  1,177  (53) 543 
Net operating result  (330) (252) (116) 31  185  (668) (229) 192  (663)
Operating profit (loss) (92) (175) 67  (47) (114) 948  (120)
Other non-operating revenue (expenses) (1) (17)
Profit (loss) before income tax and social contribution  (93) (172) 67  (46) (112) 932  (118)
Income tax / social contribution  29  120  (21) (76) 119  (220) 122 
Profit (loss) before minority interest  (65) (52) 46  25  711  (99)
Minority Interest  (2) (0) (1) (3) (68) (1)
Net profit (loss) (65) (54) 46  20  708  (99)
 
EBITDA  461  253  374  82  23  1,131  1,706  (34) 1,114 
EBITDA Margin  14.1%  8.9%  12.9%  +5.2 p.p.  +1.2 p.p.  12.8%  18.8%  -6.0 p.p.  12.7% 
-Depreciacion and Amortization  237  249  182  (4) 30  686  594  15  680 
   . Cost 
139  147  107  (6) 30  402  322  25  399 
   . Expense 
99  102  75  (3) 31  284  271  281 
                   

1- Excludes the effects of the proportional consolidation (CVM-247) and includes the effects of CVM 408 Pro forma data for 3Q05, 9M06 (except 9M06 REAL) and 9M05
2- Includes 100% of Politeno’s results only as of April 2006.


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EXHIBIT II
Consolidated
Balance Sheet

(R$ million)

ASSETS  9/30/2006
(A)
6/30/2006
(B)
Chg. (%)
(A)/(B)
Current Assets  5,354  5,089  5 
   . Cash and Cash Equivalents  1,597  1,343  19 
   . Account Receivable  1,724  1,669 
   . Inventories  1,463  1,552 
(6)
   . Recoverable Taxes  393  365 
   . Next Fiscal Year Expenses  43  28  53 
   . Others  134  132 
Long-Term Assets  1,574  1,559  1 
   . Related Parties  58  95  (39)
   . Compulsory Deposits  177  174 
   . Deferred income taxes and social contributions  388  427 
(9)
   . Recoverable Taxes  812  758 
   . Others  139  106  32 
Fixed Assets  8,778  8,636  2 
   .Investments  809  773 
   .Plant, property and equipment  6,213  5,996 
   .Deferred  1,755  1,867 
(6)
       
Total Assets  15,705  15,284  3 
       
 
LIABILITIES AND SHAREHOLDERS' EQUITY  9/30/2006
(A)
6/30/2006
(B)
Var. (%)
(A)/(B)
Current  4,790  3,900  23 
   . Suppliers  2,774  2,663 
   . Short-term financing *  1,700  937  81 
   . Salaries and social charges  129  100  29 
   . Proposed dividends/interest attributable to shareholders  3  4 
(0)
   . Income Tax Payable  0  1 
   . Receivable Taxes  98  123  (20)
   . Advances from Clients  12  12 
   . Others  73  60  22 
Long-Term Liabilities  6,399  6,686 
(4)
   . Long-term financing  4,688  5,009 
(6)
   . Taxes Payable  1,526  1,502 
   . Others  185  174 
Deferred Income  104  105 
(1)
Minority Interest  21  21 
(1)
Shareholders' Equity  4,391  4,572 
(4)
   . Capital  3,508  3,508 
   . Capital Reserves  404  401 
   . Treasury Shares  (198) (120) 65 
   . Profit reserve  806  806 
   . Retained Earnings (Losses) (129) (23) 471 
       
Total Liabilities and Shareholders' Equity  15,705  15,284  3 
       
* Includes R$1,099 million from convertible debentures held by Odebrecht, transferred in July 06   


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EXHIBIT III
Reconciliation of Shareholders’ Equity and Net Income

(R$ million)

Reconciliation of Shareholders' Equity and Net Income - CVM 247 (R$ million)
 
  Shareholders'    Net Income 
Equity     
     
  Sep 06    9M06 
     
 
Pro Forma Consolidated - does not include CVM 247  4,391   
   Effects of Politeno's pro forma Consolidation  (33)                        (2)
   Consolidated Real - does not include CVM 247  4,358   
   Gain on the assignment of right of use between related parties  (35)   20 
     
 
Consolidated including CVM 247  4,323    23 
     


21


EXHIBIT IV
Consolidated Cash Flow
(1)
(R$ million)

Braskem S.A (Consolidated)
Cash Flow  3Q06  2Q06  3Q05  9M06  9M05  9M06
REAL
 
Net Income for the Period  (65) (54) 46  6  708  4 
Expenses (Revenues) not affecting Cash  442  196  251  803  685  790 
   Depreciation and Amortization  237  244  182  680  594  675 
 Equity Result  (16) (72) 10  (110) (64) (111)
 Interest, Monetary and Exchange Restatement, Net  248  124  38  422  418 
 Minority Interest  (0) (2)
 Others  (27) (103) 22  (190) 151  (193)
Adjusted Profit (loss) before cash financial effects  377  142  297  809  1,393  793 
Cash Effect on Politeno Acquisition  0  0  0  0  0  13 
Asset and Liabilities Variation, Current and Long Term  (254) (142) (204) (697) 290  (697)
Asset Decutions (Additions) (394) (131) (200) (749) (206) (736)
   Marketable Securities  (320) (11) (13) (411) (13) (411)
   Account Payable  (82) (87) (169) (183) (165) (169)
 Recoverable Taxes  (56) (111) (65) (240) (161) (230)
 Inventories  82  (6) 10  (10) (12)
 Advances Expenses  (14) 12  19  38 
 Dividends Received  29  81  38  138  136  131 
 Other Account Receivables  (33) (10) (19) (53) (41) (53)
Liabilities Additions (Reductions) 140  (10) (4) 52  496  39 
 Suppliers  115  (18) 76  503  65 
 Advances to Clients  (20) (46) (24) (18) (24)
 Fiscal Incentives  (6) 69 
 Taxes and Contributions  (26) (73) (19) (72)
 Others  48  (1) 49  65  (37) 66 
Cash resulting from operating activities  123  0  92  112  1,684  110 
Investment Activities  (336) (463) (320) (973) (646) (963)
 Investmen Allocation  (237) (42) (236) (58) (236)
 Fixed Assets Allocation  (325) (200) (165) (695) (427) (684)
 Deferred Assets Allocation  (11) (27) (113) (43) (161) (43)
Subsidiaries and Affiliated Companies, Net  (1) (4) 4  (6) (150) (6)
Financing Activities  208  (317) (671) (93) (689) (97)
 Inflows  2,005  1,460  353  3,958  1,998  3,883 
 Amortization and Paid Interest  (1,739) (1,392) (1,029) (3,573) (2,453) (3,496)
 Share Buy-Back  (78) (57) (135) (135)
 Dividend/Interest attributable to Shareholders  20  (328) (343) (234) (349)
             
Cash and Cash Equivalents Increase (Reduction) (5) (784) (895) (960) 199  (955)
Cash and Cash Equivalents at the beginning of period  1,130  1,914  2,836  2,086  1,743  2,079 
Cash and Marketable Securities at the end of period  1,126  1,130  1,942  1,126  1,942  1,124 
             
1-Excludes the effects of the proportional consolidation (CVM-247) and includes the effects of CVM 408 Pro forma data for 3Q05, 9M06 (except for 9M06 REAL) and 9M05


22


EXHIBIT V
Pro Forma Sales Volume – Domestic Market

(thousand tons)

  DOMESTIC MARKET - Sales Volume       
         
Sales Volume - ton    1Q05     2Q05     3Q05     4Q05    1Q06    2Q06    3Q06 
 
Polyolefins Unit                             
   . PE´s - Polyethylene    195,455    180,441    218,280    187,604    176,336    180,328    178,271 
   . PP - Polypropylene    107,969    98,227    112,384    101,283    108,761    119,469    128,347 
   . Total (PE´s + PP)   303,423    278,668    330,664    288,887    285,098    299,797    306,618 
 
Vinyls Unit                             
   . PVC - Polyvinyl Chloride    84,909    90,329    109,754    93,894    98,914    95,361    109,647 
   . Caustic Soda    119,137    108,829    115,583    112,077    105,351    101,189    107,190 
   . EDC               
   . Chlorine    14,960    15,670    15,710    14,912    14,002    14,499    15,163 
               
Basic Petrochemical Unit                             
   . Ethylene    62,708    62,017    60,001    58,301    58,485    58,382    52,477 
   . Propylene    82,916    110,339    101,938    112,930    86,427    80,827    87,349 
   . Benzene    35,587    36,610    30,712    36,204    39,387    38,572    34,172 
   . Butadiene    39,807    38,133    27,753    44,509    31,515    38,104    37,947 
   . Toluene    8,115    7,509    7,729    6,022    7,921    7,854    8,172 
   . Fuel    54,325    54,824    110,311    107,854    73,594    120,030    76,918 
   . Para-xylene    33,288    31,895    31,978    28,229    14,940    9,155    16,425 
   . Ortho-xylene    9,496    7,648    11,689    12,449    13,241    15,146    16,749 
   . Isoprene    3,403    3,198    2,903    3,222    3,290    4,226    3,436 
   . Butene 1    4,724    5,554    5,509    5,808    5,875    5,754    5,768 
   . Mixed Xylene    8,848    7,793    9,494    9,244    8,528    7,987    9,461 
               
Business Development                             
   . PET    16,015    10,386    19,626    10,562    9,152    11,297    14,957 
   . Caprolactam    9,532    8,157    8,382    6,940    8,927    8,501    4,862 
 


23


EXHIBIT VI
Pro Forma Sales Volume – Export Market

(thousand tons)

EXPORT MARKET - Sales Volume
 
Sales Volume - ton    1Q05     2Q05     3Q05    4Q05    1Q06    2Q06    3Q06 
 
Polyolefins Unit                             
   . PE´s - Polyethylene   
94,338 
  87,713    87,749    69,527    80,328    104,719    106,271 
   . PP - Polypropylene   
22,599 
  18,673    36,487    19,880    12,858    15,876    19,588 
   . Total (PE´s + PP)   116,937    106,386    124,236    89,408    93,186    120,595    125,859 
 
Vinyls Unit   
                       
   . PVC - Polyvinyl Chloride   
10,667 
  24,423    17,296    10,669    12,831    8,309    6,958 
   . Caustic Soda   
      8,993       
   . EDC   
30,552 
  38,615    31,946    21,121    38,980    34,145    17,969 
   . Chlorine   
           
 
Basic Petrochemical Unit   
                       
   . Ethylene   
           
   . Propylene   
46,392 
  11,602    5,500    7,812    29,606    25,359    29,261 
   . Benzene   
54,469 
  75,287    51,486    62,167    41,092    43,396    53,472 
   . Butadiene   
    12,472      6,376    3,200   
   . Toluene   
           
   . Fuel   
49,950 
  66,797      189        30,777 
   . Para-xylene   
          13,226    5,248 
   . Ortho-xylene    4,568    3,141    2,544    5,619    2,087    4,093    3,556 
   . Isoprene    1,380    1,206    835    853    13    14    14 
   . Butene 1      2,576    1,705      1,540     
   . Mixed Xylene    7,841    6,140    5,619    520    6,885    2,060    3,828 
 
Business Development                             
   . PET    100    450    3,025    250    425    10,650    1,304 
   . Caprolactam    3,997    6,966    3,571    706    4,771    2,871    4,860 
 


24



EXHIBIT VII
Pro Forma Net Revenue – Domestic Market

(R$ million)

DOMESTIC MARKET - Net Revenue 
                 
R$ - million    1Q05    2Q05    3Q05    4Q05    1Q06    2Q06    3Q06 
 
Polyolefins Unit                             
   . PE´s - Polyethylene    660    584    621    600    556    534    595 
   . PP - Polypropylene    392    336    345    331    347    374    444 
   . Total (PE´s + PP)   1,052    921    965    930    902    907    1,039 
 
Vinyls Unit                             
   . PVC - Polyvinyl Chloride    290    257    257    237    245    228    278 
   . Caustic Soda    124    109    108    109    101    86    85 
   . EDC             -           -                     - 
   . Chlorine        20         
 
Basic Petrochemical Unit                             
   . Ethylene    149    147    112    132    129    139    145 
   . Propylene    179    241    198    249    179    155    200 
   . Benzene    83    99    59    64    63    69    80 
   . Butadiene    85    82    63    101    73    85    95 
   . Toluene    14    12    12      12    14    18 
   . Fuel    45    45    113    100    72    124    76 
   . Para-xylene    81    71    59    72    31    20    47 
   . Ortho-xylene    22    17    22    26    26    30    41 
   . Isoprene    13    16    14    15    17    23    19 
   . Butene 1    13    14    12    13    14    13    16 
   . Mixed Xylene    15    13    16    18    17    17    25 
 
Business Development                             
   . PET    66    38    62    35    27    33    46 
   . Caprolactam    61    54    47    36    42    41    25 
 
Others    124    187    177    212    188    79    173 
 
Total    2,421    2,332    2,315    2,368    2,145    2,072    2,417 


25


EXHIBIT VIII
Pro Forma Net Revenue – Export Market

(R$ million)

EXPORT MARKET - Net Revenue 
 
R$ - million    1Q05    2Q05    3Q05    4Q05    1Q06    2Q06    3Q06 
 
Polyolefins Unit                             
   . PE´s - Polyethylene    282    246    226    203    208    271    315 
   . PP - Polypropylene    62    46    85    50    32    41    54 
   . Total (PE´s + PP)   344    292    311    253    239    313    369 
 
Vinyls Unit                             
   . PVC - Polyvinyl Chloride    26    43    27    21    23    16    15 
   . Caustic Soda               
   . EDC    38    38    14      14    17    12 
   . Chlorine               
 
Basic Petrochemical Unit                             
   . Ethylene               
   . Propylene    104    20    10    14    49    43    54 
   . Benzene    124    146    97    92    68    76    126 
   . Butadiene        27      11     
   . Toluene               
   . Fuel    42    59            42 
   . Para-xylene              28    12 
   . Ortho-xylene               
   . Isoprene               
   . Butene 1               
   . Mixed Xylene        10         
 
Business Development                             
   . PET              29   
   . Caprolactam    23    33    18      20    12    22 
 
Others    29    12    53    141    143    209    191 
 
Total    754    662    594    553    583    760    860 


26


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 08, 2006

  BRASKEM S.A.
 
 
  By:      /s/      Paul Elie Altit
 
    Name: Paul Elie Altit
    Title: Chief Financial Officer