BASF maintains good biz performance in Q3 in tough time

26 Oct '12

6 min read

For example, at the beginning of this week, BASF Group company Wintershall signed an agreement with Statoil ASA to substantially expand its production of oil and gas on the Norwegian continental shelf. In addition, through the planned acquisition of US-based Becker Underwood, Inc., BASF aims to become one of the leading global providers of technologies for biological seed treatment and biological crop protection. BASF’s strategic excellence program STEP, which was already announced in November 2011, is making good progress. STEP comprises more than 100 projects that are expected to successively lower fixed costs and raise profit margins. From completion of the program in 2015, the company expects an annual earnings contribution of around €1 billion.

In the Chemicals segment, sales grew significantly in comparison with the previous third quarter. This was due in particular to sales to Styrolution Group companies in addition to positive currency effects and higher sales volumes. Earnings declined considerably, owing to lower margins as well as to plant shutdowns in the Petrochemicals division.

Sales rose in the Plastics segment, especially as a result of currency effects. In the Polyurethanes division, sales volumes and prices also increased. Despite improved earnings in Polyurethanes, lower margins for polyamide precursors led to a considerable decline in earnings in the segment compared with the same period of the previous year.

Sales in the Performance Products segment were slightly above the level of the third quarter of 2011. This was mainly the result of positive currency effects. Lower volumes and sales prices weakened sales growth, however. Earnings declined as a result of higher costs due to idle capacity as well as increased spending on research and development.

Despite positive currency effects, sales fell in the Functional Solutions segment. This was mostly due to the lower contribution from precious metal trading as a result of reduced volumes and sales prices. Earnings did not match the level of the previous third quarter, particularly because of higher raw material costs.

Sales significantly increased in the Agricultural Solutions segment. The start to the season in South America and fall business in the Northern Hemisphere were both very successful. In addition to improved sales volumes, currency effects also contributed positively to sales development. Earnings were considerably above the level of the previous third quarter thanks to higher volumes.

Sales grew significantly in the Oil & Gas segment. Sales volumes were higher in both business sectors. Greater demand on spot trading markets led to higher volumes in natural gas trading. After the suspension of production in Libya from February to October of the previous year, it was possible to continuously produce crude oil there during the third quarter of 2012. Earnings therefore significantly exceeded the level of the previous third quarter, and net income grew considerably, as well.

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