Good afternoon, ladies and gentlemen. At this time, we would like to welcome everyone to Braskem Second Quarter 2015 Earnings Conference Call. Today with us, we have Carlos Fadigas, CEO; Mario Augusto da Silva, CFO; and Roberta Varella, Investor Relations Director. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company’s presentation. After brief Braskem remarks are completed, there will be a question-and-answer session, at that time further instructions will be given. [Operator Instructions] We have a simultaneous webcast that maybe accessed through Braskem's IR website, www.braskem.com.br/ir. The slide presentation may be downloaded from this website. Please feel free to flip through the slides during the conference call. There will be a replay facility for this call on the website. We remind you that questions which will be answered during the Q&A session may be posted in advance on the website. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Braskem management and information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstance that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Braskem and could cause results to differ materially from those expressed it in such forward-looking statements. Now I will turn the conference over to Roberta Varella, IR Director. Ms. Varella, you may begin your conference.

Good morning, ladies and gentlemen. Thank you for participating in another Braskem’s earnings conference call. Today, we will be commenting on our results for the second quarter and first half of 2015. We would like to remind you that pursuant to Federal Law 11,638 as of 2007, the results presented in today's presentation reflect the adoption of International Financial Reporting Standards. The financial information in today's presentation has been reviewed by independent external auditors. Now let's go to the next slide, where we will begin our comments. On slide three, we present the highlights of the second quarter of 2015. The average cracker capacity utilization rate was 93%, it exclude the Rio de Janeiro site whose production limited by the continued feedstock issue, the capacity utilization rate came to 97%, the 5 percentage point expansion over the previous quarter was due to the increase in operational efficiency as a result of process improvement to the past year. Also contributing to this performance the recovery of part of the competitiveness of naphtha-based crackers worldwide due to its cost improvement in relation to the gas-based crackers and to capture petrochemical sales opportunities in international markets. The deterioration of Brazilian economic scenario and change in inventory rebuilding in the beginning of 2015 impacted the demand for thermoplastic resins in the second quarter, which totaled 1.2 million tons, 15% down over the same period last year. Braskem’s sales followed this trend and amounted to 792,000 tons. On the other hand, the physical dynamics of international market and the exchange rate level resulted in an increase in the export sales. Regarding resins, its exports sales totaled 373,000 ton, 53% more than in second quarter of 2014 and 46% up from first quarter of 2015. Polypropylene sales by the U.S. and Europe business unit reached 493,000…

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

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

Hi, Frank. This is Carlos Fadigas speaking. When we -- talking about demand, when you compare the first half of the year with last year, we are down 1%. But the economic situation in Brazil has -- I would say deteriorated over time. We started the year with our forecast where the EBIT was close to zero and at this point, the average, the consensus or the average of payment in Brazil is that GDP is going to go down about 2%. So that’s for GDP. As I mentioned to you, we are down 1%, when you compared to first half of this year to the last year. Our best projection at this point is that demand in Brazil will end the year roughly 2% lower than it was last year. Having said that, over the last weeks, eventually two months but that’s basically last week. The political situation in Brazil has further deteriorated. I wouldn’t say we have a different number. I just would say that the levels of certainty have increased. We have more uncertainty at this point. What our customers are saying is that they are final customer. Right now are also buying, I would say just amount that’s needed to keep the business running. So, they also see this uncertainty, the volume and type of disparity and the final demand is also an interest. It varies domestic consumables to consumer’s use. It’s negative throughout also with spectrum. The agriculture sector in Brazil is an integral part and is still positive one, but apart from that most of the segments are in the negative eventually neutral. So, maybe to wrap up, I would say at higher levels of certainty, negative scenario at this point, loss of demand for resin of roughly 2%. But we have to keep…

Now very clear. Thank you.

[Ms. Christina Holland] [ph] from HSBC would you like to make question? Thank you for the call. And congrats on a great quarter. There’s been some quotes in newspapers talking about the naphtha contracted Petrobras that there was something about 50-50 chance you can get it done by the end of this month or not. Can you provide us any color on how that’s progressing and any more detail on what Petrobras is asking for versus what you wanted to do, so you can get kind of some idea of how far apart the Petrobras are on terms, I mean, new long-term contract? Thank you.

Well, [Christina] [ph], thank you for the question. Typically we see I think now through the press to either take call or make comments in the SA during the press conference. I actually said, I’d like to avoid given specific chance of signed amount and contract. So what I said was I would like to avoid say putting a chance on that, so I’d just go with 50-50. So that’s what I said. To give a more color on where we are right now, first of all, [indiscernible] versus Braskem deal and Petrobras deal, they are in constant talk. I myself will be at Petrobras next Monday. We will have a meeting there. It’s actually to address the naphtha contract. So we are engaged, we are meeting, we are discussing. I see the efforts on both sides not only Braskem, it’s motivated and focused on finding the solution. The Petrobras is doing the same. We could what we believe should be a creative alternative and the payable is the formula that there is that could go from the initial suggestion was 90% of other prices, Amsterdam rather than an uplift European referenced price, just 210% of that and that would vary with the price of the naphtha. The higher the price goes the better for the oil producers, the naphtha producers. That was tougher for the buyer. Therefore, there would be a discount. The lower it goes it’s tougher for the naphtha producers and better for the petrochemical companies to pay premium on top of that. So that was our proposal. Petrobras is seeing the same position they had before. I don’t know how committed you are there, but over time Petrobras claims that they have used roughly half of the naphtha. They used to supply us to add to…

Yes. The only comments I can’t make because as you know that’s a delicate topic. And on top of that, as you said, I would like to speak on behalf of Petrobras. I’ll tell you what I read through the press and we already see kind of formal knowledge in Brazil. Petrobras, especially the current officers, the new Board, the new officers, they are pretty disciplined and most of the things that were decided and signed it and gone into press. So we are going through these various spaces. There are no audits about everything that has been done in the past. This had been very public and all the so called wrongdoing things that shouldn’t have happened and so on. So that’s what we read. My understanding is that one of the analyses they made about the several decision in several quarters was around this naphtha contracts and the information. We have this debt among all the internal compliance and governance procedures. There were some of them that weren’t properly addressed. That’s all I know. Having said that, the same documents that mentioned the lack of full compliance with governance rules, they also mentioned the same documents. They also mentioned it’s explicitly and they were not able to find any loss to Petrobras. And on this topic, there is extensive material supporting the conditions at the time of the negotiation and how these contracts did not bring a loss to Petrobras, that’s also part of the document we have access to. But there several decisions made in the past, they are usually revisited, reanalyze it, scrutinize it and checked against the all the compliance and governance procedures of Petrobras. This contract is one of them. Okay. Thank you very much.

That’s all I address. Thank you, too.

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

Good afternoon. Thanks for taking the question. Fadigas, this is actually a follow-up to the Portuguese version of the call. We contemplate about the outlook for demand from China and how the outlook for demand for a number of polymers is working in and how are you seeing this market? But I was wondering if you can talk a bit about what kind of impacts does the startup of a number of our CTO and MTO facilities in China? Do you still preview to start for these year and early 2016 may have on the market. Can the increase capacity be easily absorbed by the outlook of demand?

Okay. Pedro, China is actually one of the region in the world where capacity added twice I mean, mainly, if you can talk about polymers, most consist of poly, especially about polyethylene. If you ask Middle East and China, right. For several years now we have been we have been pricing the adding capacity addition in China and part of chemicals, not only addition in China this whole to all the things China and they usually think about whether they’re going to be adding all these projects whether they will enough water. The water is a right place and so on. So I’ll confess to you, I’m not an expert in China but what I have learned overtime especially over the last five years is that these huge offers especially in polymers never happened the way that it will forecast it. It has happened previously in the past some years ago, back in ’06, with [indiscernible] has dampened the operating rate activity were acquired, but never happened in mature way with polyethylene and polypropylene. So if we are to think about the additions of capacity of ethylene, the forecast for the next several years, starting with ’15 going all the way to ’18, what see actually is that just kind of a balance, actually it start to change typically in polyethylene in more dramatically in ’18 was because of the U.S. not because of China. But of instance the number we have given idea for this year is an addition of CapEx that is 224. Its 4% in terms of the debt given 24, we had 6 million from the balance sheet. That’s from top of our market 130 million tons. Globally, we are growing 3% a year as we grew slightly above that 4% growth on top of that.…

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

Thanks.

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

So, I'd like to thank you all for participating. We had a very long call in Portuguese. We ended up having a short call in English. I’d like to thank you all who joined us in this call in English. I’ll finish by saying that, I’m glad we had a good operational performance in the second quarter. It came at the right time, the operational performance because the margins were actually captured. The weaker Brazlian real finally is adding, is bringing back competitiveness to the Brazilian industry to show its true positions. With better than sales, we were able to add from that and capture the margins for Braskem and reach a record EBITDA in this quarter. As we read it, we also kept working on saying long-term. So the signing of the contract for the [indiscernible] Northeastern Brazil, we are working very hard on that. We hope to have it finalize soon. So, we are going to have energy contracted until 2037 and so we are going to have someone else to think about in the future, not to this management. And as we work on in the margin, in second part, we also kept focus on the project in Mexico. So all-in-all, despite the news in Brazil, despite the political environment, economic environment in Brazil, I’m glad to say that the team kept the focus and we delivered good results. Thank you all for participating in the call and I wish you all have a good week.

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