BASF maintains good biz performance in Q3 in tough time

26 Oct '12

6 min read

After a solid first half, BASF maintained good business performance overall in the third quarter. Sales rose by 8% to €19 billion, particularly due to higher volumes. At just under €2.1 billion, income from operations (EBIT) before special items was 5% above the level of the third quarter of 2011. The higher contribution from the Oil & Gas and Agricultural Solutions segments more than offset lower earnings in the chemicals business (which comprises the Chemicals, Plastics, Performance Products and Functional Solutions segments).

At the presentations of the results, Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE said: “ In the past quarter, the outlook for the world economy has once again not improved and the uncertainty on the international capital markets continues. In China, growth in the third quarter of 2012 has slowed once again compared with the same quarter of the previous year. We see stabilization at the current level in China, but no visible upturn.”

The company has adjusted some of its expectations for the global economy (previous forecast in parentheses):

• Growth of gross domestic product: 2.2% (2.3%)

• Growth in industrial production: 2.8% (3.4%)

• Growth in chemical production: 2.9% (3.5%)

• An average euro/dollar exchange rate of $1.30 per euro ($1.30 per euro)

• An average oil price of $110/barrel in 2012 ($110/barrel)

BASF does not anticipate an upturn in the global economy or in demand in its chemicals business for the fourth quarter of 2012. “However, we still aim to exceed the 2011 record levels in sales and EBIT before special items,” said Bock. The forecast is supported by the resumption of the crude oil production in Libya and by the company’s successful business with crop protection products. Earnings from the chemicals business in 2012 will not match the level of the previous year.

“In this challenging environment, we are concentrating on our strengths and expanding our business, but we are also keeping an eye on the costs and are continuing to optimize our business processes,” said Bock.

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