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Unipar Carbocloro SA reported a strong performance in its Q3 2025 earnings call, showcasing significant growth in EBITDA despite a challenging petrochemical market. The company achieved a recurring adjusted EBITDA of 266 million Brazilian reais, marking a 14% year-over-year increase. However, the stock price saw a slight decline of 0.92% following the announcement, closing at 66 reais.
Key Takeaways
- Unipar’s recurring adjusted EBITDA rose by 14% YoY to BRL 266 million.
- The company maintained a solid cash position of BRL 1.7 billion.
- Despite a downturn in the petrochemical cycle, Unipar expanded its production capabilities.
- The stock price fell by 0.92% in the aftermath of the earnings release.
Company Performance
Unipar demonstrated resilience in Q3 2025, with a notable increase in its recurring adjusted EBITDA and a strong net income of 107 million reais. The company’s focus on local markets, particularly in Brazil and Argentina, and strategic commercial partnerships have bolstered its competitive position. Despite international price declines in PVC and caustic soda, Unipar’s financial discipline and operational efficiency have been key drivers of its robust performance.
Financial Highlights
- Revenue: 1.26 billion reais
- Recurring Adjusted EBITDA: 266 million reais (↑14% YoY)
- Net Income: 107 million reais
- EBITDA Margin: 20%
- Cash Position: 1.7 billion reais
- Net Debt/EBITDA Ratio: 1.12x
Outlook & Guidance
Looking forward, Unipar anticipates a market recovery and plans to capitalize on sanitation market opportunities. The company expects lower capital expenditures in 2026, potentially less than half of 2025 levels, as it completes its largest investment phase. Unipar remains committed to its competitiveness and sustainability agenda, with strategic projects set to enhance production capacity by 2026.
Executive Commentary
CEO Rodrigo Carnaval emphasized Unipar’s operational and financial discipline, stating, "Unipar maintained its operational and financial discipline." CFO Alexandre Jerusalem highlighted the company’s positioning, saying, "We are increasingly better positioned to serve this market." Carnaval also stressed the importance of the chemical industry’s commercial agenda, asserting, "The chemical industry should work on the commercial agenda."
Risks and Challenges
- Petrochemical Cycle Downturn: Continued downturn could pressure margins.
- Currency Fluctuations: Appreciation of the Brazilian real may impact dollar-linked revenues.
- Market Saturation: Potential challenges in maintaining growth amid competitive pressures.
- Economic Reforms in Argentina: Could affect market conditions and demand.
Unipar’s Q3 2025 earnings call underscored its ability to navigate a challenging market environment while maintaining strong financial health and operational efficiency. The company’s strategic initiatives and disciplined approach position it well for future growth, despite current market headwinds.
Full transcript - Unipar Carbocloro SA (UNIP6) Q3 2025:
Earnings Call Moderator, Unipar: Good afternoon and welcome to Unipar’s Third Quarter 2025 earnings call. Joining us today are Rodrigo Carnaval, CEO; Alexandre Jerusalem, CFO and IRO, as well as our IR team. Please be advised that this event is being recorded and simultaneously translated. The translation is available by clicking the interpretation button. For those listening to the call in English, you can mute the original audio in Portuguese by choosing "Mute original audio." The presentation is available for download on the platform and on the company’s website at ri.unipar.com. Following the presentation, we will begin the Q&A session when further instructions will be given. Before we proceed, we would like to clarify that any statements made during this call regarding Unipar’s business outlook, projections, and operational and financial targets constitute the beliefs and assumptions of the company’s management and are based on currently available information to Unipar.
Forward-looking statements are no guarantee of performance and involve risks, uncertainties, and assumptions as they relate to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that general economic conditions, industry conditions, and other operational factors may affect Unipar’s future results and could lead to outcomes that differ materially from those expressed in such forward-looking statements. Now, I’d like to turn the call over to Alexandre Jerusalem to begin the presentation. Jerusalem, please go ahead. Hi everyone, welcome to our Third Quarter 2025 earnings call. Our material is already available on our IR website, and the numbers in the presentation exclude the IAS 29 rule applied on hyperinflation economies, which is still the case of Argentina. Starting with the quarter’s highlights, the external challenges remain similar to those of previous quarters, pressuring our margins and testing our ability to overcome them.
The petrochemical cycle remains in a downturn, with fall in prices and historically low margins, a consequence of a persistent global supply-demand imbalance, and our international price benchmarks for PVC and caustic soda fell 5% and 11% in the quarter, respectively. The flow of imported PVC into the Brazilian market remains at historically high levels. This quarter, we had Colombia and Egypt as main players this quarter. The curtailment level set by the national system operator for our self-produced power in Brazil also remained high in the quarter, reaching 17%. The domestic market in Argentina remains weak, both for PVC and caustic soda, reflecting the still sluggish Argentine economic activity amid the Milei’s administration’s macroeconomic reforms. On the other hand, Unipar has demonstrated resilience in the face of external challenges.
This is achieved through a sales portfolio predominantly composed of chemical products, which accounted for 60% of our net revenue and 84% of the sales volume in the quarter, a large part of which is not exposed to the petrochemical cycle. We also achieve this through a concentration of sales in the local markets of Brazil and Argentina, where our strategic commercial partners are and to whom we offer differentiated logistics and service. Additionally, we proactively executed a debt reprofiling during the quarter, extending maturities and reducing costs, and we will comment on this later. As a result, our recurring adjusted EBITDA reached BRL 266 million in the quarter, up 14% year over year, with an EBITDA margin of 20%. Our net income was BRL 107 million, and our operating cash generation reached BRL 269 million in the quarter.
Considering the year-to-date EBITDA, we reached BRL 927 million, which is a 52% increase compared to the same period last year. Regarding our liquidity position and debt profile, we ended the quarter with a cash position of BRL 1.7 billion, enough to cover 47 months of debt amortization, and our debt reached an average term of 76 months, with 90% maturing only after 2029. Our leverage, measured by net debt over EBITDA, ended the quarter at 1.12 times. Regarding operational performance, on the next slide, we ended the quarter with a consolidated electrolysis utilization rate of 77%, with 80% in Brazil and 67% in Argentina. Both in Brazil and Argentina, we actively managed production levels in response to local market demand, which led us at times to reduce operating rates during the quarter, especially in Argentina, to control inventory levels.
Regarding our self-produced power in Brazil, we reached 63% in the quarter versus 54% the previous quarter, with a curtailment level set by ONS of 17% against 22% the previous quarter. As a reminder, power is one of the main inputs at Unipar, and we have high-producing partnerships here in Brazil, and the effect of the curtailment in our results leads to a loss to self-producers, and this negatively affects our EBITDA because we have to pay higher power costs. However, the month of September already showed better performance than the 3Q average, with 70% self-produced power in Brazil and 11% curtailment.
Net revenue in 3Q25, on screen 6, was in line with the previous quarter due to high volumes in caustic soda, up 7%, and PVC, up 4%, which offset the negative effect of the declining international prices for caustic soda and PVC of 11% and 5%, respectively, as I said earlier, and the 4% appreciation of the Brazilian real against the US dollar. As a reminder, this negative effect from the real’s appreciation exists because our revenues are mostly US dollar-linked. The production and commercialization of chloroalkali derivatives remain a strategic focus for Unipar, as it’s a business segment that is not exposed to the petrochemical cycle and has higher added value, and Unipar has a differentiated scale compared to competitors.
Moving on to the next slide, we see the evolution of our cost of goods sold, which is pretty much in line quarter over quarter, despite the higher price of ethylene contracted by Unipar and the higher sales volume of caustic soda and PVC mentioned earlier. This was possible due to a lower curtailment percentage of self-produced power in Brazil compared to the previous quarter, although it’s still high. The 16% appreciation of the Argentine peso against the US dollar, lower fixed costs resulting from a series of initiatives implemented since last year, and they were mainly implemented in Argentina and included an organizational restructuring among other measures. We also had a positive effect of our operational excellence captured through improved industrial technical coefficients.
Moving on to slide 8, we have the quarterly EBITDA comparison, starting with a comparison between the third quarter of 2025 and the third quarter of 2024. We had a 14% increase due to a higher volume of caustic soda and chloroalkali derivatives, offsetting the 15% decline in PVC sales and lower fixed costs resulting from the implementation of a series of initiatives since last year, as previously mentioned, which had an effect on EBITDA. In Q3, we had a 13% decline in EBITDA, mainly due to the negative effects of the Brazilian real appreciation and the reductions in international caustic soda and PVC prices. Regarding net income, on the next slide, we closed the quarter with BRL 107 million, and for the nine-month year-to-date period, we reached BRL 489 million, representing a net margin of 13% for the year-to-date.
Looking at the shareholder remuneration so far, we have distributed BRL 650 million in dividends, and we repurchased 1.2 million shares worth BRL 63 million without compromising our financial health. On slide 10, we show the evolution of our cash balance. In the quarter, we had BRL 269 million in operating cash generation, benefited from our sales mix and concentration of sales in our local markets, as mentioned earlier, a CapEx of BRL 281 million, which included BRL 142 million allocated to the Cubatão Technology Modernization Project, net debt issuance of BRL 514 million, and dividend distributions of BRL 400 million, resulting in a cash position of BRL 1,720,000,000, enough to cover 47 months of debt amortization.
On the following slide, you can see our debt profile with net debt of BRL 1.6 billion at the end of September, leverage of 1.12 times, and an average term of 76 months, with 90% of our debt maturing only after 2029. 74% of our debt consists of debenture issuance in the Brazilian market, and virtually all the remainder is composed of financing from BNDES, Banco do Nordeste, and a structure with guarantee from Euler Hermes, the German export credit agency. Our debt profile improved significantly quarter on quarter, with a new issuance of debenture worth BRL 900 million carried out in July, our largest one with 7- and 10-year series, which was in addition to the disbursements from BNDES financing lines and the completion of disbursing from the Euler Hermes guaranteed line. With this, we achieved a debt profile that gives us comfort to navigate external scenarios with their challenges.
Now, I turn the call over to Carnaval, who will continue the presentation. Thank you all, and I’ll be back for the Q&A session. Carnaval, over to you. Thank you all very much. Good afternoon, everyone. Thank you, Alexandre, for presenting the results. I also want to thank you all for joining us today. As noted, the scenarios both in Brazil and Argentina remain challenging. In this context, Unipar maintained its operational and financial discipline, which allowed us to preserve our focus on execution, efficiency, and the delivery of resilient results. From a strategic standpoint, our main investment projects continue under execution, aligned with best sustainability practices and aimed at increasing efficiency, production flexibility, and value added to the portfolio. In Cubatão, we have advanced to the final phase of the technology modernization project.
The implementation of the unique membrane technology will enable a reduction of approximately 18% in energy consumption, in addition to reducing waste and emissions, an important step in our decarbonization and competitiveness journey. In Santander, we are progressing with projects among which I highlight the 15% expansion of chlorine and caustic soda production capacity that will give us greater flexibility in the production of chloroalkali derivatives and PVC, in addition to increasing the availability of caustic soda for the market. The start of operations is scheduled for the second half of 2026. We also have the expansion of PVC emulsion capacity, a higher value-added product with completion expected by the end of this year. With this expansion, we’ll increase the current PVC emulsion production capacity by approximately 25%. These projects are aligned with our long-term agenda, which combines competitiveness, sustainability, and value generation.
On the regulatory front, we had a relevant development last week. The updated PRESIC was sent for analysis in the Federal Senate. This is an essential instrument to reestablish fair competition conditions, especially in the face of increased imports with dumping practices. It’s essential that the Brazilian industry, in partnership with the authorities, continues to strengthen trade defense mechanisms and advance public policies that promote competitiveness. We continue with an engaged team, robust assets, and financial health, which allows us to maintain resilience in the face of the downturn cycle and conjunctural challenges. Our strategy remains consistent, focused on increasing future competitiveness and sustainable value generation. Thank you very much. I will now turn the floor over to Raquel, who will moderate the Q&A session. Thank you, Carnaval. We’ll now begin the question and answer session.
To ask a question, please click on "Raise Hand." If your question has been answered, you can leave the queue by clicking "Lower Hand." To ask a question in writing, please send it through the Q&A icon providing your name and company. Our first question is by Regis Cardozo with XP. Regis, go ahead. Hi, Carnaval and Alexandre. Thank you for your presentation. Good afternoon. Can you comment a bit on the company’s plans to announce dividends before the end of the year due to the changes that are expected in taxation practices? Would that make sense for you or not? That’s my first question. My second question, you described your projects briefly, but can you give us a timeline of the CapEx phasing? Let me explain why I’m asking.
We saw a debt increase this quarter, which is motivated to the payout of dividends and also higher CapEx now that you’re investing more to modernize the Cubatão plant and also in the new electrolysis equipment. What can we expect in terms of this cash generation curve? Thank you. Hi, Regis. Good afternoon. Thank you so much for your questions. Let me get started talking about the dividends that you asked about. On our side and throughout the whole market, I believe we are keeping a close eye on the approvals of the government reforms. As I always say, the company is very much concerned with any types of moves related to dividends in order to maintain our financial health and our leverage under control.
For now, there is nothing concrete that I can share with you, but we’re always keeping a close eye on the reform approvals. As a reminder, this year we have already approved BRL 650 million in dividends, of which BRL 400 million were in August and BRL 250 million back in April. For the dividends in August, this was mostly as an advance payment for the 2025 results. Now, about CapEx and projects. Indeed, the movement we saw this quarter was already anticipated by the team earlier this year. We are now just completing the largest CapEx cycle at Unipar. The largest project is the technological modernization of electrolysis in Cubatão, migrating the mercury and diaphragm technologies to the membrane technology. This is a large project that we’re completing, and 90% of the amount has already been disbursed.
That’s why we saw an increase in the CapEx numbers in Q3 and an increase in our gross debt and net debt as a consequence. This quarter, we had CapEx and dividends as factors that negatively impacted our leverage, but this was fully expected. From now on, what we can expect is the continuation of strategic projects, some of which are already ongoing, and we mentioned the main ones during the presentation. Expanding the capacity of our PVC emulsion plant is one of them, and also investing in a NAITH electrolysis equipment in the Santander plant, which will help us with the chloroalkali production in case the chloroalkali market is more attractive than the PVC market and vice versa. Our cash generation resilience in the Santander plant will become stronger as a result.
What you will see next year, based on the projects that are ongoing, is a much lower CapEx level than the levels we had this year. Thank you. This lower CapEx level can be less than half? Just so I understand the magnitude we’re talking about. We do not give guidance about this, Regis, but it is a significantly lower level. Okay, thank you. Sure. If you wish to pose a question, please click on the "Raise Hand" button or send your question in writing through the Q&A icon. Please hold. Regis Cardozo from XP. Do you have another question? Hi, everyone. Yes, if you allow me to ask another question about the effect of pricing after the anti-dumping implementation. Hi, Regis. Hi, everyone. Thank you for your question.
Regis, about the anti-dumping pricing, we’ve been implementing the new pricing because of the anti-dumping measures, but right now we should be looking at the Brazilian demand, which is heated because of the interest rates, lower utilization of PVC, and high inventory levels in the market. The full implementation of this anti-dumping approach will be postponed in time, considering the current demand levels we are seeing right now. Thank you for your question. Thank you. We have a question by Ricardo Rosino. He says, "Good afternoon. What does Unipar expect in a two to three-year horizon?" Unipar has been doing its homework and working on its competitiveness agenda. In two to three years, I see Unipar harvesting the fruits of this project.
We will see the results of the CapEx investments in the next two to three years, and we still see an accelerated agenda, and Unipar is the main supplier for the market. In a two to three-year horizon, I see Unipar as a competitive company growing organically in the sanitation market. Thank you very much for your question, Ricardo. We have a question by Lorena Capellini. How have you been keeping synergy with Orange to use renewable energy at Unipar’s plants? Are you planning to expand this partnership? Hi, Lorena. Thank you for your question. I think it’s worth mentioning that right now we’ve been discussing a lot about curtailment, which has been reducing the availability of renewable energy in Brazil. This is a topic that will be discussed in the National Congress to adjust the regulation.
Right now at Unipar, we’ve been talking about how to maximize the use of our current existing capacity and also look for opportunities to expand this in the future. Thank you very much for your question, Lorena. Okay, we have another question by Eduardo Bonis with Santander. Eduardo, please go ahead. Só instante enquanto verificamos outras perguntas. Please hold while we pull for questions. Recebemos a pergunta de Eduardo Moniz. We got a question by Eduardo Moniz with Santander in writing. Can you give us a prospect for the spreads for chlorinated caustic soda and PVC for Q4 2025 and 2026? What can we expect in terms of demands as well for the same periods? Hi, thank you for your question, Eduardo. Starting with PVC and caustic soda, these are products that our prices follow the international references.
We saw a reduction in the international prices of PVC and caustic soda in Q3. The market remains with the reference prices under pressure in Q4. In terms of demand, what we’ve been seeing is that the demand for PVC in the Brazilian market has been impacted mainly in the civil construction industry by the high interest rates. For Q4 and for 2026, both for PVC and for caustic soda, for now, we do not expect any structural improvement. Of course, what we saw in 2025 can happen again with some caustic soda capacity or premises being paralyzed, not in the Brazilian market, but this could have a positive impact on our market. That is not the scenario expected for Q4 and for 2026. For chlorinated products or chloroalkali derivatives, what we see is a more stable demand.
Most of the sales in this area is for sanitation, waste treatment, hygiene, and cleaning, which are very resilient segments that are not affected by the economic activities or high interest rates. These segments do not feel the negative effects of the petrochemical cycle either. For chloroalkali derivatives, what we see is a stable demand and also a very stable level of prices, much more than for PVC and caustic soda. We expect stability also for Q4 2025 and 2026 full year. We are very well positioned to serve the wave of new investments in sanitation, both for chloroalkali derivatives and for PVC supply in investments that require pipelines. This is what we expect for 2026 and beyond. We have another question by João Almeida. Hi, everyone. Good afternoon.
I’d like to understand how we can think about a steady-state cash generation at Unipar after this CapEx cycle, assuming a normalized commodity cycle. Now, a second question. Can you explain a bit more about the electrolysis utilization rate this quarter and what to expect from now on? Thank you. Hi, João. As I said earlier, we do not give guidance for the coming quarters, but what I can tell you is that this year’s cash generation was pressured by the petrochemical cycle, as we said earlier. This made the spreads feel pressure because of the drop in international prices. In Q3, we saw a negative effect with the foreign exchange rate appreciation, the Brazilian real appreciation here in Brazil. In Argentina, we also saw some changes related to FX.
If you consider that these factors pressured our cash generation this year, then you can have an idea that when these factors are somehow mitigated, then we can actually have higher cash generation. Another aspect that can contribute to a stronger cash generation is the completion of the technological modernization in Cubatão, which should also bring about greater technical reliability to the plant as a whole, in addition to the economic benefit with lower input consumption with the same nominal capacity. We are talking about less electric power use, about 18%, and also steam. Having said that, what we see is that Unipar is increasingly better positioned to serve this market and to capture the gains when the petrochemical cycle recovers and the demand normalizes, including in the PVC segment. As a consequence, we are going to generate additional cash.
With regards to CapEx, as I said earlier, we do not give guidance related to CapEx, but we do expect a much lower level of CapEx than we had in 2025. This is going to contribute to a stronger cash generation next year, contributing also to our leverage level. Thank you. This concludes the Q&A session. I would like to turn the floor over to Rodrigo Carnaval for his final remarks. Thank you, Raquel. Thank you, everyone, for joining us. I would like to emphasize that despite the challenging scenario we are experiencing in the high interest rates, Brazilian real appreciation against the US dollar that impacts our results, and a cool demand for PVC, we had excellent results, which proves how resilient our projects and our company are in the face of these challenging scenarios.
The chemical industry should work on the commercial agenda, and I’d like to thank ABICIN, the association. Last week, we saw our project PRESIC being approved by the government, and this is going to impact the company’s capacity to promote sustainability with proceeds to approve future projects. We now expect the Federal Senate to approve this project as well, and we hope to have good news to share with you soon. Thank you again for joining, and thank you, Unipar team, for the excellent results. I wish you all success for the results of Q4 2025. Thank you very much. Bye.
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