BASF heading for record year again
30 Ottobre 2007
BASF – The Chemical Company – also increased its sales and earnings in the third quarter of 2007 and is thus heading for a record year again. BASF’s Chief Financial Officer Dr. Kurt Bock
pointed out to analysts and journalists that all segments contributed to the increase in sales. In particular, the businesses acquired last year performed strongly.
The demand for BASF products and innovative system solutions remains at a high level. BASF was able once again to increase volumes in comparison to the very strong quarter in the previous year,
and slightly raise sales prices.
Overall, BASF increased sales by 5 percent to nearly ?14 billion in the third quarter of 2007. Income from operations (EBIT) before special items rose by 6 percent to ?1.7 billion.
Cumulative sales in the first nine months of 2007 rose by 13 percent to ?43.3 billion. EBIT before special items increased by 9 percent to ?5.9 billion.
Earnings per share more than doubled in the third quarter due to higher income from operations as well as a lower tax rate as part of the German Corporate Tax Reform 2008. This has resulted in
non-recurring, non-cash income being included in the third quarter due to the revaluation of deferred taxes.
Positive outlook for full-year 2007
BASF is now expecting for 2007 the following conditions:
Global economic growth of 3.5 percent
An average oil price (Brent) of around $70/barrel
An average dollar/euro exchange rate of $1.35 per euro
Risks are still seen as lying in geopolitical tensions as well as regional conflicts.
BASF is continuing with its restructuring measures and cost reduction programs in order to expand its position in the competitive environment.
For the year 2007, BASF expects sales of close to ?58 billion. Also in the fourth quarter, scheduled plant turnarounds, in particular in Petrochemicals, are set to reduce earnings.
Nevertheless, BASF expects EBIT before special items in 2007 to exceed the previous year’s record level.
All segments increase sales in the third quarter
In the Chemicals segment, sales (up 5 percent) and EBIT before special items both increased. All divisions with the exception of Petrochemicals contributed to this increase. The Petrochemicals
division was impacted by scheduled plant turnarounds.
Sales in the Plastics segment rose 3 percent due to higher volumes and prices. Earnings did not match the excellent result of the previous year’s quarter. This is primarily due to a decline in
earnings in the Performance Polymers division.
The Performance Products segment increased sales slightly by 1 percent due to higher volumes. A significant earnings increase in the Construction Chemicals division was not able to compensate
for declines in other divisions.
The Agricultural Products & Nutrition segment posted the strongest sales growth of all segments in percentage terms, up 7 percent. Both divisions within the segment improved earnings. In
Agricultural Products, higher sales prices were realized, in particular for fungicides for soybean cultivation in South America; also volumes were significantly increased. Restructuring
measures in Fine Chemicals have been clearly successful. In addition, higher sales prices for several vitamins contributed to the significant earnings increase.
Higher volumes in natural gas trading led to a 3 percent sales increase in the Oil & Gas segment. Earnings were below the result of the previous year’s quarter due to lower oil production
and declining margins in natural gas trading.