Good morning, and thank you for standing by. Welcome everyone to Braskem's third quarter 2022 results conference call. With us today we have Mr. Roberto Simões, Braskem's CEO, Mr. Pedro Freitas, the company's CFO, and Ms. Rosana Avolio, IRO, Strategic Planning and Corporate Market Intelligence Director. This event is being recorded and all participants are connected in listen only mode during the company's remarks. After Braskem's presentation, there will be a question and answer session when further instructions will be provided. Should any participant need assistance during the call, please press star zero to reach out to the operator. This event is also being broadcast live via webcast and may be found at Braskem's website at www.braskem.com/ri, where the respective slide deck can also be found. Slide selection can be made by participants. The audio facility will be made available after the event is over. Webcast participants may pose their questions via the website. They'll be addressed after the closing of the presentation by our IR team. Before moving on, it's important to say that forward-looking statements made during this call concerning the company's business outlook, as well as, financial and operating targets and prospects are based on the company's assumptions and beliefs, and also on information currently available to the company. Those forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions as they refer to future events, and therefore depend on circumstances that may or may not materialize. Investors and analysts should have in mind that macroeconomic conditions, industry conditions and other operating factors can also affect future results of the company, and therefore lead to results that will differ considerably from those expressing these forward-looking statements. I'll now turn the floor over to Ms. Rosana Avolio, Investor Relations, Strategic Planning and Corporate Market Intelligence Director, who will start the presentation. Please, Ms. Avolio, you have the floor. Good morning, ladies and gentlemen. Thank you for participating in Braskem's conference call. We will present today the results for the third quarter of 2022. Let's go to slide number three. I will make some comments about the company's main highlights for the quarter. The global scenario in the third quarter of 2022 remained impacted by global macroeconomic uncertainties, geopolitical tensions and perspectives on the performance of the world's major economies. These uncertainties directly influenced the global demand and consequently, the dynamics of the petrochemical industry. Moving on to financial highlights, the company reported recurring EBITDA of $371 million. Additionally, cash generation in the quarter was BRL 889 million. Concerning return to shareholders, the return on cash flow was 31%. Now going to our credit metrics, the corporate leverage remained low in the period, and we maintained strong liquidity position, enough to cover the debt maturities for the next five years. It's worth noting that the company's debt profile continues to be very elongated and the company continues to maintain its rated investment grade by S&P and Fitch Ratings. In the quarter, we had experienced significant advances in the Ethane Import Terminal in Mexico. Braskem Idesa obtained its approval for the constitution of the joint venture with Advario from the Federal Economic Competition Commission of Mexico. The construction started in July 2022, with physical progress of 22% by September 2022. We would like to remind you that this terminal will have the capacity to import, on average, 80,000 barrels of ethane per year, providing conditions for Braskem Idesa to import all its raw materials needs. Besides allowing a study for the expansion of about 20% of the polyethylene production capacity in Mexico. Now moving on to the highlights of ESG agenda. We launched Voqen, an energy and natural gas trading company that will help Braskem and its clients in the energy transition. In addition, we launched Oxygea, a business and innovation hub that will foster the emergence of new technologies aimed at sustainability and digital transformation. Finally, Braskem in the United States signed a contract to purchase renewable energy for the Neal plant in West Virginia, starting its supply by the end of 2024. Now moving on to social area. We advanced in the program of financial compensation and support to the reallocation in Alagoas and ended the quarter with a proposal acceptance rate of 99.6%. In addition, the company implemented actions to support the needy population, circular economy and environmental education in the communities surrounding its operations. Let's now go to slide four. In the third quarter of 2022, the recurring EBITDA was $371 million, 54% lower than the previous quarter, and explained primarily by lower international resin spreads, by the lower export volume of resins in Brazil, lower sales volumes of polypropylene in the United States and polyethylene in Mexico. In addition, in the quarter, we had the accounting effect of inventory realization in the net amount of $75 million. Excluding this inventory realization effect, recurring EBITDA was $448 million for the quarter. Considering the nine months of 2022, the company's accumulated recurring EBITDA was $2.92 million. Now moving on to the next slide, we are going to hear about the highlights of each of the segments. This slide, we present the main highlights of our operations in Brazil. In the third quarter of 2022, the utilization rate of petrochemical plants in Brazil was 79%, five percentage points higher than the previous quarter, mainly due to the resumption of operations after its scheduled maintenance shutdown at the Rio Grande do Sul Petrochemical Plant. In the Brazilian market, resin sales in the quarter increased 2% in relation to the previous quarter due to higher availability of products and the higher demand in the period because of seasonality. As for resin exports, they decreased by 18% due to fewer opportunities in the international market, given the high inventory levels in the global chain. Within this context, Braskem's recurring EBITDA in the third quarter of 2022 was $312 million. The next slide, I'm going to talk about the geological event of Alagoas. The chart on the left shows the total amount of provisions for the geological event of Alagoas, which is BRL 13 billion, of which BRL 6.1 billion had already been disbursed. Moving on to the chart in the middle, we can see the balance of provisions. The balance registered at the end of the third quarter of 2022 was approximately BRL 7.2 billion. The chart on the right, we can see the disbursement schedule of the resources. Of the current balance, about 67% was registered in short-term and 33% in the long term. It's important to mention that the company cannot rule out future developments related to the issue or its associated expenses, and the cost to be incurred by Braskem may differ considerably from its estimates or accrued and provisioned amounts. Now, moving on to the next slide, we keep on speaking about the geological event in Alagoas, and I'll make some comments on our progress. First, in relation to reallocation and compensation, Braskem maintained its process of reallocation and financial compensation of families located in the neighborhood areas of risk areas in Maceió. All the proposals for financial compensation reached BRL 18,259 in the end of 2022. Just focusing on the high rate of acceptance of proposals, which amounted to 99.6%. In terms of closure and monitoring of wells, by the end of October 2022, out of 35 mining fronts, nine belong to the sand filling group, out of which four have ongoing filling, three at advanced stages of filling. Now, in relation to the other 26 fronts, the actions of closing and monitoring of salt wells are following the schedule approved by ANM, the National Mining Agency. Finally, also make some comments about social and urban as well as environmental measures. The activities of these fronts are concentrated on urban mobility, social compensation, and actions in unoccupied areas. For this specific area, I would like to highlight the following points. The hiring of a specialized consulting firm to evaluate and monitor the execution of the environmental plan and the integrated action plan in accordance with which was established in our socio-environmental agreement. We started two projects related to urban mobility out of a total of 11 actions. There was 64% progress in the demolition process at the Mutange hillside area. Finally, we've signed and confirmed the term of agreement for the adoption of requalification and indemnification for the region Flexais. Now, let's move on to the next slide. This slide, I'll present the main highlights of operations in the United States and Europe. In the third quarter of 2022, the utilization rate of the polypropylene plants in the USA was 74%, 7 percentage points lower than in the second quarter of 2022. This reduction is explained by lower demand in the region and shorter unscheduled stops. In Europe, the utilization rate decreased by 1 percentage point compared to the previous quarter due to lower availability of raw material, which was caused by operational problems of local suppliers, and also to the lower demand in the period. Now, speaking of commercial performance in the United States, the sales volume for the quarter was 381,000 tons, which represents reduction of 19% over the previous quarter. In Europe, sales volumes in the third quarter of 2022 was 128,000 tons, with an increase of 8% when compared to the previous quarter. In this segment, recurring EBITDA in the third quarter was $62 million. Now going to the next slide, I will address the highlights of the operations in Mexico. In Mexico, the utilization rate in the third quarter of 2022 was 76%, 9 percentage points higher than in the second quarter of 2022 due to higher ethane supply by Pemex and also ethane imported through Fast Track. Concerning sales, there was reduction of 5% over the second quarter 2022 due to rebuilding of inventory levels at Braskem Idesa. Recurring EBITDA for the segment in the third quarter of 2022 was $14 million. Now let's go to the next slide, where we'll address the ethane terminal in Mexico. The beginning of the construction of the ethane import terminal in Mexico was one of the major highlights of the quarter for the Mexico operation. The Terminal Química Puerto México is the joint venture between Braskem Idesa and Advario, with each partner holding 50% of the company's shares. Its raw material supply capacity for the terminal will be approximately 80,000 barrels of ethane per day, which represents 120% of Braskem Idesa current raw material needs. The CapEx of the project is estimated about $400 million, and the expectation is that the beginning of the terminal operations will be the second half of 2024. The physical progress of the project, the end of September 2022 was 22%. Finally, it's worth pointing out that in the addendum signed with Pemex in 2021, Braskem Idesa has the right of preference to purchase all the ethane that Pemex has available and not used in its own production process until 2045. Now going to the next slide, we are going to address company's cash generation in the quarter. In the quarter, the company had cash generation amounting to BRL 889 million. Excluding the payments related to Alagoas geological event in the quarter, the company had a recurring cash generation of BRL 1,557 million. The main things that were recurring EBITDA for the quarter and the positive variation in working capital due to reduction in accounts receivables caused by lower sales volume and lower price references in the international market, and also by the reduction in inventory levels due to lower price references in the international market. Now let's go to the next slide. At the end of the third quarter 2022, the company maintained a very long debt profile with strong liquidity position and most of its debt maturing after 2030. The average debt term was around 13 years, and the company's current liquidity level guarantees the coverage of debt maturities in the next 63 months, without considering the available international revolving credit line in the amount of $1 billion maturing until 2026. Let's move on to the next slide, where we'll talk about company's credit metrics. Aligned with the dynamics observed in the previous quarter, Braskem maintained its solid credit metrics and corporate leverage remained low in the third quarter and closed at 1.55x. It's worth pointing out that the aim is to maintain a robust cash position with a very long debt profile, and that we are committed to efficient capital allocation and the maintenance of our investment-grade rating. Moving on to the next slide, let's talk about our ESG agenda. Braskem held the second edition of ESG Day, a meeting with the financial market to share the advances of our commitments to sustainable development. During the event, we reinforced our commitment to strengthening Braskem's role in the carbon-neutral circular economy and shared Braskem's advances in the pillars of actions, which include eliminating plastic waste and fighting climate change. Both initiatives are part of the company's growth avenues for the future. The presentation and the video of the complete event can be accessed on Braskem Investor Relations website. Moving on to the next slide now. During the quarter, Braskem launched Voqen, an electric energy and natural gas trading company. Voqen was born with a portfolio of BRL 3 billion, whose aim is to leverage business opportunities through the collaborative creation of competitive solutions that can accelerate the sustainable energy transition of the company and the industry at large. The company has also launched a sustainable joint venture formed between Braskem and Fujitsu for the development of biogas technology based from plants with a reduction of carbon footprint in its production process. As a reference, in 2021, based on external consultancies, the global market of bio-MEG represented $26.3 billion. We have also launched Oxygea, which is a business and innovation hub that will foster the emergence and development of new technologies focused on sustainability and digital transformation. Now moving on to the next slide. Here, I would like to highlight some initiatives carried out by Braskem in order to contribute to the pillar of human rights and social responsibility. To support low-income population, Braskem, in partnership with NGO has contributed with donations of basic food baskets. In addition, Braskem will donate another BRL 5 million to the same campaign. Regarding private social investments, during the quarter there was Plastianguis held in Mexico, encouraging recycling and promoting environmental education. 143 tons of plastic waste were collected, benefiting 7,000 people. In Brazil, another edition of Plasticoletivo took place, promoting environmental education in the communities surrounding Braskem operations. More than 18.5 tons of plastic waste were correctly disposed, benefiting about 4,400 people. In the Corais de Maré project, Braskem is part of a joint initiative that developed an innovative technique to speed up the restoration of corals using plastic, in addition to training environmental agents in the region. This project also included a cleaning task force to raise awareness of the population about the correct disposal of plastics. Now let's go into the next slide. On this slide, we'll talk about the petrochemical scenario of polyethylene and polypropylene in 2022. Lower global demand for resins, coupled with higher inflation globally and high inventory levels in the global chain, resulted in lower spreads during the third quarter of 2022. According to the latest external consultants' projections, the expectations are that polyethylene and polypropylene spreads are to remain pressured throughout the fourth quarter 2022 due to lower global demand associated with the entry of new capacity of these products. Moving on to the next slide, I'll present the company's short-term outlook. For Brazil, there is a reduction in ethylene production. The commercial side, we expect to reduce sales volumes of resins and the main chemicals due to lower demand in the estimated period. Now concerning spreads, external consulting companies expect a drop in spreads for resins and basic chemicals due to lower global demand. In the United States, both utilization rate and sales volumes are expected to remain at similar levels to those of the third quarter 2022. The spreads of PP-propane in the U.S. are expected to decrease, however, at levels above the recent historical average. Finally, in relation to Mexico, there is an expectation of increase in production volumes because there is an expected increase in total supply of raw material. In this situation, the expectation is to have an increase in sales volumes of PE due to greater product availability. Now going to the next slide, I would like to remind you of our main goals for 2022 and broken into our strategic pillars. Starting with productivity and competitiveness, our focus will be on capturing value with the transformation initiatives, achieving a recurring earnings of $302 million per year for 2022. Moving on to sustainability, our focus is on intensifying actions in recycling, expansion of renewables, and reduction of carbon emissions. As to diversification, there are two relevant projects in terms of diversification and also growth. The construction of the ethane import terminal in Mexico, in addition to definition of a partner, both of them already concluded, and also the progress with the feasibility studies to invest jointly with SCG Chemicals in the construction of a new green ethylene plant in Thailand. As to people, governance, and reputation, we'll continue to focus on evolving on all fronts related to the geological event in Alagoas. Finally, in our capital allocation pillar, we'll be focused on returning value to shareholders, in addition to maintaining our investment grade rating according to the rating agencies. With that, we conclude the presentation of Braskem's third quarter earnings for the year 2022. Thank you very much for your attention. We are now going to move on for the Q&A session. Ladies and gentlemen, we'll now start the Q&A session. If you have a question, please press star one. To remove your question from the queue, use star two. Our first question comes from Pedro Soares from BTG Pactual. Please go ahead. Good morning, everyone. Good morning, Roberto, Pedro, Rosana. I have two questions, actually. The first one about the spread issue. Rosana was quite clear in terms of the expectations of the company and also talking about the further deterioration. If you could perhaps expand your horizon through 2024 mainly, do you expect this final stretch for 2022 would be getting closer to the valley as opposed to the peak? Or if next year we would see further deterioration vis-a-vis what we've seen in the second half of this year. If you could put those results into context and if we would be expecting an EBITDA below $2 billion. In other words, will we be facing a down cycle going forward? If you could comment on it, I'd appreciate it. Thank you. Also a second question about CapEx. The company has been going through a more controlled phase in terms of capital allocation, but with this deteriorating scenario, if you would foresee additional reduction in the short term or not, if you have got that all under control. Thank you. Hello, Pedro. This is Pedro Freitas speaking. It's nice talking to you. As for the spread issue this year and next year, part of the reason that the spread in this year is dropping, and we've been talking about this since last year, we had an expectation of a downtrend and spread levels. There are three main drivers, some non-recurring events which happened last year. Also from the point of view of demand, this year we had lower demand than expected because of the lockdowns in China. On the supply side, my third driver this year, we had new capacity coming in, which was expected, so this down cycle was somewhat expected as well. This new capacity coming in is unfolding now, especially in China. For 2023, there is some more new capacity to kick in. On the demand side, we expect to see a growth in demand across the world below historical levels, of course, because of some events. Based on macroeconomic news global wise, when we look at polyethylene next year, we see a growth in supply more than the growth in demand, not to the tune of this year, but higher. 2024, we see a reverse in that trend because investments for 2025 are not being made now. Things that should be under construction now are not. Looking at those numbers coming from an external consultancy firm, we have this outlook that 2022 will still see more capacity kicking in, but then we'll see a reverse, especially for polyethylene, which suffered, if I may, more than other products. Right now, we see a spread moving sideways. I'm getting some feedback here from my voice. Hang on a second, please. Okay, here we are. Okay. Despite this perspective pointing to a Q4. For Q3, we saw, as I said, a sideways move in terms of spread. For the short run, Q4. I think I was cut off for a moment. Now he's back. Can you hear me now? Yes. As I said, new capacity coming in and a higher capacity for 2024. As for capital allocation, it's only natural. When we have a cycle of better results, we end up expanding our portfolio a bit more in terms of investments. There are investments that for which we can choose the timing, and then we match that with our cash flow, and the opposite also. We are able to reduce investments very much in line with the cycle momentum. That review is happening right now. We had announced early in the year $1.2 billion in investments for the year. The expectation that we have now is about $1 billion. We have reduced that number within the portfolio by $200 million in terms of CapEx, without major impacts on the operations. Because demand is lower, so we do not need to have plants working at full steam, right? We do not need to have operational level to the max. We're analyzing that on a case-by-case basis, of course. We have these expectations that we will reduce CapEx for the year to the tune of $200 million, give or take. For next year, CapEx level is expected to be lower as well. Now, on the same token, we will prioritize safety, so investments on safety will be preserved. Of course, this prioritization effort is very intense because we are focused also on our growth strategy, especially around recycling and renewables. We're trying to strike that balance right now. Okay. Thank you. Thank you, Pedro. Our next question comes from Bruno Montanari from Morgan Stanley. Please go on. Good morning, everyone. Thank you for taking my questions. A follow-up to Pedro's question about the spreads. It's part of the cyclic nature of the industry, but perhaps the size of the drop was higher than expected. In addition to CapEx, what other measures can the company take or is taken right now on the side of expenses and costs to be able to offset those negative numbers in the company's operating margins? Whether if you could perhaps manage more working capital going forward after several quarters last year where we were consuming that, we saw a better cash generation flow. How can that evolution of the spreads, of the cash generation affect the dividend payout discussions? Apparently, there is less room to higher payouts. A last question, if I may. If you could please comment on the material fact released on Novonor corporation or partnership, so perhaps their potential sale of their stake in the company. Has anything happened on that front? Have you been meeting with them? Any news on that front would be very welcome. Thank you. Hi, Bruno. As you said, the magnitude, the speed of the drop in spreads was slightly higher than expected or above what we expected. Basically, I would say for two reasons. The lockdowns in China. One of the reasons early in the year, nobody would imagine that things would play out that way. Even last year, when we were working on our projections, nobody thought about that scenario, to have that level of lockdowns in China so widespread and for so long. Of course, that has an impact on demand, and that led to that drop in spreads. That's one of the main reasons. A second driver was the war in Ukraine and the subsequent increase in the cost of energy in Europe. Of course, that also led to a drop in spread because of the cost of gas, an impact on feedstock once again. That, that's a fact. When we look at the working capital, which was a comment that you made just now. When we have a drop in prices, it is only normal to see that happening. When spreads go up, you have an increase in prices, and then we increase the value of what we have in terms of accounts receivable, or in other words, credits that we provide our clients. Our inventory levels also go up. You have more working capital being consumed. When feedstock prices go down, we have the opposite effect. We have more working capital freed up. This offset, or even a hedge, if I may, is something we see happening quite often in our industry. As to what else we're doing, to your point, I mentioned CapEx. We are reviewing our fixed costs line. The hiring of new personnel is going now through a much more rigid approval process than in the past. We have been looking at all fixed expenses and also variable expenses from SG&A to try and identify where we can have savings. We are revisiting contracts with suppliers as well. We are looking at how we can reduce output. We are also trying to optimize or looking at our asset portfolio and assess our assets to see if it would make sense for us to simply shut down one of our lines, right, and see what would happen, or pull back dates on some scheduled maintenance stops. Anything we can do to fine-tune our costs. When we see the effect of that on other costs, that may be favorable, right? Part of that repercussion will be seen in the inventory safety levels, right? If I'm producing less, my safety inventory security level might also drop. We are revisiting all of that, including the purchase of inputs for our production. That's a deep dive done by assets, by purchase, by procurement, taking into account a lower level production scenario. As for fixed costs and SG&A, also a very strict discipline in terms of hiring, approving, and so on. We have become extra strict in that regard. As for the working capital front, there's also a concentrated action in place to review payment terms, maybe try to extend payment terms with suppliers. If you look at our payment terms, you'll see that as a rule, it is quite good, but we're always going back, trying to find other opportunities in that respect, working with clients as well. As I said, once again, our safety inventory levels also being looked into. We are working across the board to your point. As for the dividend payout question, we have consolidated our results at BRL 1.4 billion in the year. You know our dividend payout policy. We're gonna pay the mandatory minimum level, 25%. We have to wait for the final quarter results. I cannot predict what's gonna happen, given that foreign exchange variation has an important effect on our results. In this quarter, that variation was negative to the tune of BRL 1 billion. Depending on the foreign exchange variation, we may have either a positive or a negative effect in the bottom line. We'll be paying at least the minimum 25%. Then as every year, we'll see what we can do in addition to that, always with a look with an eye to our dividend payout policy. It is a forward-looking policy. As you know, if something changes in the market, if the economy picks up faster than expected, or if we have an external event that would improve the overall scenario, all of that will be factored in as we work on our dividend payout moves. I think, it's worth mentioning that our dividend payout policy, always looks at our leverage level and looks ahead to be able to strike a balance, especially when we have, different cycles beginning or starting. Our policy has proven to be very robust, to face market volatilities. Lastly, as to your question about the material fact which, we published last week. We received this letter from Novonor. As everyone knows, their divestment process has been going on for some time now, and the interaction they're having with potential buyers seems to have moved forward. That's what we can assume from that letter that they sent. When they informed us that in the coming weeks they might come in direct contact with us or other potential interested parties. If that happens, well, Braskem has not taken part in that process directly, so we have not been negotiating that specific point. If that happens, Braskem will have direct interaction as the due diligence process starts. That's what we have in this letter where what this means is, brace yourselves, be ready, because we're going to need your support very, very soon. What are we doing now? We are updating and reviewing the information around due diligence processes so that we can be ready. We are of course very much concerned with the confidentiality level of that kind of information because we'll be talking about more detailed information if we reach that stage. For now, we haven't started the due diligence process, but we do believe this is gonna happen very soon. That's what we have so far. Okay. Thank you, Pedro. The next question comes from Leonardo Marcondes of Bank of America. Good morning. Thank you for taking my questions. Trying to quantify spreads for 2023, I would like to understand if you were seeing something along the lines of what we observe for the second part of this year, or do you expect to have narrow spreads for next year? Now trying to understand when are we going to see the bottom of the cycle because spreads would probably pick up again by 2024. I'd like to know what are the main drivers in your perspective. Would it be increase of demand, reduced capacity? Where would you really expect to see that coming from? Thank you. Hi, Leo. Thank you very much for the question. Concerning spreads for 2023, we are still running internal discussions because of all the uncertainties in the macro perspective. Relying on our external consulting companies, it seems we are expecting greater demand. PVC, PE is estimated based on the history to have an increase. There is an effect of global demand not developing so much, and the demand for petrochemical products really growing slowly up. It was 1.3 of 1.5 within kind of ratio here. Considering all that situation, we expect to have spreads similar to what would be the low cycle spreads. This is a general comment, of course, and I'll go back again into diversification. Why have we invested on diversification? It brings positive effect. That's why we invested for the past 10 years. Basic petrochemical products have some resilient spreads. In the U.S. spreads, the average is even higher than the average of the industry. Diversification shows that spreads, yes, at the lowest of cycles, but some of the spreads are still sustained and above the average of the industry. This resulted from our process of resilience. Now speaking of upsides, when we analyze the fundamentals of petrochemical industry, everything has changed in terms of offering. There has been a substantial change, as Pedro pointed out in a previous question. There has been a change in the perspective of growth of global demand. The upside results from the scenario in Europe, political tensions, but also the policy of restrictions in China. China, of course, plays a very important role in the plastic consumption in the world. If China opens the market again, we'll go back to that narrative that we consider to be more appropriate for upcoming years, which is a spread above the industry levels. Great. Thank you very much. The next question comes from Vicente Falanga from Bradesco BBI. Good morning. Good morning, Roberto, Pedro, Rosana. Thank you very much for answering my questions. I have three quick questions. First, the prices of ethane, they have changed since the end of September, like 30% up till now. Can you capture the benefit of it on the fourth quarter, especially in Mexico? Do you have any estimate of impact? Secondly, concerning the export of resins and considering Brazil and Mexico, last time I checked, Mexico exported to Europe as well. How badly are they being affected by the slowdown in China, in Europe? When do you expect the international global chain to really get level again? Finally, as we have seen a price adjustment to freight costs, do you expect to keep on running on U.S. pricing, or do you expect to change the indexation? Thank you very much. Okay. As for ethane, it dropped at normal levels. Our cycle from when we buy the feedstock because we calculate the cost based on the average. At the end of the day, we're talking about a moving average for cost. In Mexico, that effect is felt in two months. We expect to see that benefit, quote-unquote, of the drop in ethane costs in the last quarter of the year. Now, we need also to assess the spread. We also had a difference in the polyethylene price, as you mentioned, because of the lower availability of the product across the world. Of course, we have this all those effects on global demand. Basically, when we look at those specific effect coming from ethane, the answer is the effects will be seen in the final quarter of the year. As for exports, in Mexico, we continue to export to Europe. We sell into the U.S. too, but Mexico is very competitive, so they are able to allocate products across any region. For the U.S. right now, they have excess offerings in the U.S., given all the investments that were made. Right now, to sell in the U.S. is not a priority because it's not very attractive. It's better for us to sell elsewhere. In Europe, for example, or in the Central America and South America regions, that continues to be our focus. The main one, of course, across the Americas, minus the U.S. To your question about the indexing metrics, we see no change in that because those indexes are given by the region that exports the most. The ones who export the most to Brazil, polyethylene and PVC, come from the U.S., so the American prices are the index. The polypropylene coming from Asia has a different indicator. Those indicators will not change because within our commercial policy, in terms of pricing, that's what bases our numbers. That's what we see happening in real-life commercial flows, and that's what we continue to use going forward. Okay, thank you. The next question comes from Luiz Carvalho of UBS. Hi, Pedro. Luiz. Thank you for answering the question. I would love to go back to some points that you've discussed, but maybe take a different side of them. Pedro, you have broken down results by region, which is great, so Brazil, Mexico, U.S., and Europe. In this level of spread, what attracted my attention is that the only region that has really maintained cash generation was Brazil. Could you please tell us about competitiveness levels in all the three regions where we are represented? Mexico, it involved $40 million, something like that. Now, a second question about dividends. We can see some of the companies today changing somewhat their policies. Petrobras has done that, and that has gained more visibility of basing dividend distribution based on cash generation. My question is, would it make sense to come up with any changes along these lines, considering that you now have controlled leverage, very long-term debt profile, many projects? Would it make sense to base your dividend distribution on cash generation? Thirdly, concerning sales, you were talking about that in the upcoming weeks. I would like to know, based on the contact you have with Novonor, because there was an attempt to follow-on at the beginning of the year, and apparently, there was a demand for one specific price close to BRL 40-BRL 42. Now the numbers seem to be very far from that. How does it all interact going into a well-structured, let's say, conversation, trying to get to appropriate share prices earning? Of course, considering that the Novonor creditors would also have a say in this process. Thank you. Hi, Luiz. As to cash generation, you did mention that the U.S. also came out above average for the cycle. When we look into the details of why that happened in the U.S. and in Brazil, in Brazil, we have the basic chemical products. The effect on basic chemicals bring to Brazil is unique to this country. That's one of the positive effects that we saw for Brazil. Also, as Brazil is larger in terms of volume, so most of the working capital that we used was allocated in Brazil, of course. When we look at those two components, they can explain that point that you have raised. That's the reason why, in summary. Once again, now looking ahead, looking forward, we do believe that ratio, EBITDA cash generation should not present such a mismatch across different regions. But we'll have to wait and see. When we talk about the dividend payout, and what we see other companies doing using cash flow levels, that's a topic that Braskem is considering adopting in our dividend payout policy. But what we're living through now is a good explanation of why we haven't done it yet. Ours is a cyclical industry with significant speed, historically speaking. When we look at those factors, we are also concerned about preserving our investment grade. We do not want to push it and commit to a dividend policy that will lead to a mandatory payout at a relevant level when we are in a down cycle. To strike that balance within our policy is something we are trying to do. The acid test right now will help us find that balancing point. In our case, it is more difficult than for other companies which are dependent on a single product. If you have iron ore or oil, then you depend on a single variable. In our case, we have multiple products, several different feedstocks. It's different for us to identify all the parameters to put together a whole policy. That's why it takes a bit more time for us to do that than others. As for sales, as I mentioned, we do not take part in the decision-making process or in the sales and price discussions. We know about price a little more because during the follow-on in January, we had access to the book, so we knew the prices which were offered in the book. We had a reference, right? Nothing came out of that, but we had access to that, so we knew that price played a major role. But that price sensitivity still holds. As far as we know, conditions and terms are the same, and Petrobras' outlook is still the same. We have no reason to believe that the price sensitivity has dropped. We believe it has been the same. If you look at the newspaper headlines, we do not know what the basis are for those headlines, but well, there is an expectation that prices will be at a level which is pre-January, but we do not know whether or not that is true. In a nutshell, we have no reason to believe that sensitivity to pricing has decreased. Again, we have no access to that information, what's being negotiated, what's being discussed, what's on the table. Okay. Thank you. Thank you. The next question comes from Gabriel Barra, Citigroup. Thank you, Roberto, Pedro. Rosana, thank you for getting my question. Can you hear me all right? Yes. Most of the discussions have already been made, but I would like to make some follow-ups and maybe some new sides of it. If we can talk about the change in the president and in Brazil and all the differences that we have observed in terms of import rates and everything, can you tell us your perspective on it for the upcoming year? Will there be any potential changes or impacts for the company? Secondly, if you could tell us more about Alagoas in this quarter. There was a small amount in your provisions according to the balance. Where there is still a potential point for discussion and increases, what are, let's say, the sensitive points of this discussion so that we can understand really what it means for the company in the future? Something with Novo Mercado. We started this discussion, and then no longer it was addressed. What is the current status? Do you still expect changes into Novo Mercado, and what kind of discussion are you having with Petrobras? Is this still an open discussion to migrate? These were my points. Well, Gabriel, thank you for your questions. As to the change in administration. Government, we can put it all under the same umbrella of industrial policy. We do not know what the new administration will be doing in terms of industrial policies. We're still waiting to see what's gonna happen. Of course, actions which were taken this year in terms of import fees and taxes, we believe that they should be linked to a reduction in the so-called Brazil cost, but we need to wait and see what the next government will do. Our focus will remain on the fact that any change on industrial policy or any change on this long-standing framework should be linked to a reduction in the so-called Brazil cost, and that's where our focus will be. It's still early to know. We do not know what the new government will do in terms of concrete measures. As for Alagoas, within our provision for Q3, slightly over BRL 7 billion. When we split that, we have the reallocation compensation. We are looking to complete the proposal submission process to the end of the year. That's our goal. We'll try to reach that goal until the end of the year to avoid extending that to next year, but we are well advanced in that process. As for payments, we make the proposal, the proposal is analyzed, and then we get feedback. There is an acceptance of that, a formalization process, and then we make the payment. So that process takes about two to three months on average. The disbursement today at BRL 2.4 billion, a third of the provision, give or take, this should go on until early next year for most of that to be really disbursed. As for the salt hubs at BRL 1.5 billion, we are moving forward quickly. Two of the nine cavities which we intend on filling with sand are well advanced. We are discussing with the regulating agencies about shutting down those units. A fourth unit is already being studied, and the remaining ones are in the pipeline. It's a multi-annual program. It's not gonna be solved next year, just so you know. As we move into socio-environmental measures, there is a series of actions being implemented. As I said, it's a multi-year program. It's not focused on the short run. Other additional measures are ongoing, such as demolition, 64% of that work of those houses and areas, properties being addressed. Today, or in the short run rather, I mean, for the next 12 months, we should be forking over BRL 5 billion of those BRL 7.2 billion. What do we have in terms of topics that might lead to future liabilities? We have ongoing negotiations with some public agencies with other demands relative to the same case. We have advanced in terms of negotiations. We cannot today quantify the final number. We have been making provisions for that as discussions move forward. We had an adjustment just now in provisions in the second quarter, which was slightly higher than expected, exactly because we had advanced in those discussions. It has been a productive process at the end of the day, this discussion with the public agencies. We have been making partial provisions as we move forward, like I just said, but it's difficult for us to state firmly or quantify an amount at the end of the day. But I'd say there's nothing today that would point to something very material or very relevant in terms of amount. Nothing pointing to that level of impact. When we look at the total of BRL 13 billion, which is a total amount for the provision, right? We're talking about much less significant amounts when compared to the BRL 13 billion. Lastly, as the question about the Novo Mercado. The migration to the Novo Mercado as per our strategy, Petrobras and Novonor. The strategy was to sell preferred shares and then the sale of common shares. As the sale of preferred shares did not happen because of market conditions, that process came to a halt. Today, we actually made a proposal to have a Braskem in Novo Mercado, but we know that there were discussions between Petrobras and Novonor about that, a potential new shareholders agreement. The process did not move forward, that process for selling preferred shares, the dialogue was interrupted. Maybe something is happening between Petrobras and Novonor, but we are not privy to that, right? We believe things have come to a standstill. With this new advancement from Novonor, their move to divest, apparently, Petrobras has a tag-along right, and also a right of preference. If Novonor moves forward, Petrobras will need to assess their rights to decide what to do going forward. Okay. One follow-up, if I may. You talked about Petrobras. Any offer made for Novonor, Petrobras has a right to receive the same terms, correct? Yes. This would be the tag-along right. Not only Petrobras, but all Braskem's shareholders when a change in control happens. That's a given. The right of preference, which is the following: Petrobras may offer the same value, the same terms, same conditions of the contract to Novonor. Novonor could buy it, right? Or Petrobras could buy Novonor, right? If it was in their best interest. Okay, thank you, Pedro. The next question in English comes from Matías Vammalle of BlueBay Asset Management. Hi, good afternoon. Thank you very much for the call and for answering my question. Hopefully, you can hear me all right. Just a few questions from my side. The first one is, I see that both at Braskem but also at the Braskem Idesa, the Mexican operation level, there has been a positive release of working capital. In Braskem, it seems to be related to inventories. In the Mexican operations, it seems to be related to accounts receivables. Given the positive and sizable impact that these had on the overall cash flows, on the free cash flow of both entities, if you could comment a little bit, what was the driver behind that and whether you think this would be reversed in the coming quarter? Then also wondering if you had any contact with the rating agencies to keep them informed and discuss whether the current environment would have any implications on the ratings of either Braskem or Braskem Idesa. Thank you. Hi, Matías. I'll take the question. It's nice talking to you. Matías asked about the working capital. Just to be sure, I'm going to translate his questions. The working capital in Brazil happened based on inventory, and in Mexico, it was based on accounts receivable. The question is, what were the drivers for that to happen? If we see in the coming quarter, we could see a reversal of that. The main driver, Matías, was the drop in prices. In the case of Brazil, the drop in naphtha and oil prices led to a lower inventory value. We also had some effect coming from a reduction in products prices, so that also affected accounts receivable in Brazil. We also saw a drop there in Brazil, accounts receivable. In Mexico, the same. A drop in polyethylene, when we talk about Mexico, led to a reduction in accounts receivable. Basically, the main reason was this drop in price. We also had a slow reduction in the sales volume at some points, especially in exports leaving Brazil, which also led to a reduction in accounts receivable. Looking at the price trend, what we see happen in October, November, and as we look to the next quarter, we do not see a reversal of that trend in that short term. Again, it'll depend on oil prices and also on prices of products. As I mentioned earlier, we are closely monitoring our assets, our inventory levels, not only of finished products, feedstocks, but other inputs as well. This optimization process will help us maintain our position in working capital. That's what we believe. There is a point which is in our release, we did not really highlight during the presentation, but I'll take the opportunity. Does not have a direct link with working capital, but there's an accounting adjustment which has no cash effect, but it is impacting EBITDA of -BRL 75 billion. The EBITDA that we reported is there, but it would have been $77 billion higher if we had not made the inventory adjustment, the value of the inventory. We did a test on September thirtieth, the finished products inventory, what was the market price for that? Then we made a provision, which has already been reverted in October, vis-à-vis the market value of our inventory. That $77 billion, which negatively impacted our EBITDA in September, reverses in October, right? Just to be sure. That's a non-cash amount that affects the results, the results of the third quarter negatively, and then it is reverted in the fourth quarter. As for the rating, the credit rating, we talk with credit agencies on a constant basis. In the past few days, we were in contact with them. We did not sense any concern on their side. We have a very transparent relationship with them, so they know our cash situation, our financial position. Our long debt profile is something they look at from a very positive light. If you look at our cash position as we close the quarter, it is a cash position which is higher than usual for the company, $2.2 billion in cash, + $1 billion that we have available. It is a cash situation or a position which is quite comfortable in terms of net availability of over $3 billion to face potential uncertainties. All of that combined impacts our credit rating, of course. Our rating until recently had a negative bias, and now we have a stable bias across the three rating agencies. We want to maintain our investment grade, and they do understand our intention of maintaining that investment grade, and that's key for our financial management and our business strategy as well as we move forward. I was wondering, I don't know if I can squeeze one more question. You did mention at some point that the CapEx for this year was being revised by about $200 million at the Braskem level, and that you were also thinking of lower CapEx next year. I was wondering if you can give us a bit more, if you have a bit more visibility into next year, but also if you could comment on CapEx plans, given that they have a big project currently undergoing. Thank you. The part of your question was cut. If you could repeat the last bit, please. Yes. Thank you. Sorry. Basically, it's with regards to capital expenditures. I think on the Braskem side, you mentioned that this year's fiscal 2022 was expected to be $200 million lower and also a bit lower for next year. If you have a bit of visibility or you can give us some sort of a frame as to how much lower will it be next year. Also thinking about your Mexican operations, given that that there's a big project in Mexico, do you have any flexibility on delaying or postponing some of the CapEx? Thank you. Okay, I'll take that. Matías has asked about CapEx, the review of BRL 200 million approximately. That's clear. The question is, if for next year, what do we expect? We are now still defining. We do not have a number to announce for next year, but it is a definition process, a revision process to have a smaller portfolio. We're talking about a reduction relative to what we will complete this year, actually. This is part of what we have always done, looking at the cycle, cash generation, leverage level, and CapEx. Our CapEx is also more cyclic driven, right? When we have shorter cycles, and that's what we do. If we look at historical levels, a CapEx of 60% of EBITDA or something like that. As for Mexico, the construction of the terminal is a priority because at the end of the day, this will provide us with a stable operating capacity for the future. Delaying the terminal is not something we are considering right now. What we're doing is the following. We have brought in a partner, Advario, a Dutch company, part of a German group, a global leader in midstream logistics industry for liquids and gas. We brought them in. The total investment is $400 million. Half of that will be. No, just let me take a step back. Out of the $400 million, we are now trying to find external funding for at least 60% of that amount to be a long-term financing for 60%, at the very least 60% of $400 million. The balance would come from a joint venture in 50/50. The equity coming in from Braskem would be to the tune of $80 million. Part of it this year within our portfolio, but with components throughout another two years. If you look at the annual effort, it's not very material. It is restricted to Braskem Idesa. Braskem Corporate is not part of that in terms of investments for that project. That's how we have designed it. It's a non-recourse ideally, right? Coming from and from the two partners. But again, we do not see as an interesting alternative to delay that investment right now. Thank you. Well, ladies and gentlemen, let me remind you that to ask a question, please press star one. There is one question coming from Barbara Halberstadt of JP Morgan. Hello. Thank you for taking my question. I think we've already discussed most of the questions that I had in mind, but I would like to have a follow-up concerning the funding of the Mexico CapEx. They just don't have a project financing. Do you already have discussions going on with potential banks to carry on this transaction? Is everything already in progress? Please, if you could give us some more color on the topic, I would appreciate that. Secondly, concerning cash generation, have you monetized any tax credits? Do you still have them available to monetize in the last quarter, the fourth quarter of 2023, or have you already carried down? Hello, Barbara. The Mexico financing line is moving forward. We are trying to find that funding. We are already in negotiations with counterparts, banks and other institutions, and we hope to finalize that in the coming months. There is a very high level of interest, and we are now in the process of choosing, right, of bidding to define how that funding will unfold. As we have the utility quality to it, we need the terminal to work full steam. We have a very interesting level of return, very stable, and that generates very large interest in terms of financing that investment. That's a very solid investment, and higher because of the critical role it plays for the operation of the complex as a whole. As for monetizing credits, we didn't have anything above normal. That ICMS credit that we had is now over. It has all been monetized. What we have now in terms of variation, in terms of, taxes and tax credits, is the normal variation that we usually see. Nothing atypical on that front, and we do not expect to have anything like that going forward. Thank you. You have allocated capital and liquidity, and you said about maintaining liquidity and robust buffer. With the price of bonds in the market, is there any intention, idea? Have you been analyzing making an additional purchase and using this cash to rebuy anything? Oh, Barbara, we are always looking at those opportunities. As I mentioned before, we increased our cash level because of that uncertainty linked to the nature of the cycle. If the overall scenario improves to a higher level than we had anticipated, then we will look alternatives of repurchasing it as we did before, and we did something like that this year. But it'll depend on the scenario, the overall scenario. As is, we are waiting to see what's happening, and then we'll make a decision. Right now, the focus has been on preserving our liquidity before we make a final decision. Thank you. With that, we close the Q&A session. I would like now to hand it over to Roberto Simões, CEO of Braskem, for his closing remarks. Good afternoon, everyone. Thank you so much for being with us. Pedro and Rosana have covered your main observations and comments and questions. We are aware of the challenges and uncertainties at the macroeconomic level, especially as we go through very important geopolitical events in China and Ukraine. Of course, those have impacts on what we do in our operations. It's important for us to remind ourselves of our strengths, our strategies, which have adopted for the past decades to face challenges such as those we have ahead of us now. From the point of view of competitiveness and productivity, it's always nice to remember as we are a global company, leader in Americas and with strong assets, all of them well-positioned and within the global cost curve when compared with other players. From the point of view of finance, you know this, you monitor this situation very closely. Our credit profile is quite robust, and we apply a very strong discipline in capital allocation. We remain in a very strong liquidity position and with long-term debt. When we think about investments and looking ahead in the short run for 2023, we have just completed an analysis for the past six months of how we see the petrochemical industry, especially in the main markets by 2030, and where we would like Braskem to be in 2030. Not only where we should be investing, but also where we should perhaps reduce investments, as Pedro mentioned, perhaps reduce production or even shut down some of our industrial operations. That exercise, which was shared with you and then the main shareholders, we're now looking, trying to define across what we feel we want and desire and demand on plastic consumers of the projects that we have in our pipeline, both in renewables and in recyclables and biopolymers. The discipline we will have as we define early next year our strategic plan for the next three years. Which of those projects, the ones which are public and the ones which are not yet public, which should we encourage, which should we keep on hold, and which we should perhaps discontinue. Especially being very pragmatic, because of the moment we're going through now in 2022 and as we look for, trends for 2023. We have engaged many people inside the company to do that exercise and also involved the board, and we'll be making that public in January and February next year. Lastly, it's important to say that within this strategic guideline, diversification and a broad portfolio of products and the use of different feedstocks and working with several suppliers and working with different countries where we have assets, all of that speak to our strong ability to mitigate risks, overcome adversities, and of course, capture new value generation opportunities as we optimize our assets. Having said that, thank you very much for your participation, and this completes our conference call. I'll see you next year, early next year when we will meet again to announce our results for the year 2022. Thank you, and have a nice day, everyone.