BASF confirms 2018 goals, warns of trade 'risks'
Frankfurt am Main (AFP)
German chemicals giant BASF on Friday said it was on track to meet its 2018 targets despite a slight dip in second-quarter net profits, as it warned of heightened risks from global "trade conflicts".
Net profit at the Ludwigshafen-based group slipped 1 percent year-on-year to 1.48 billion euros ($1.7 billion) between April and June, falling short of analyst forecasts.
Earnings before special items however were up five percent to 2.4 billion euros, the group said in a statement.
Revenues climbed three percent to 16.8 billion, boosted by a strong performance from the group's oil and gas unit thanks to higher prices and the start of production at new fields in Norway.
The only division that recorded a drop in sales was the performance products segment, which BASF blamed on "negative currency effects" and lower demand for specialised products for the health and nutrition industry.
Looking ahead to the full year, BASF confirmed its cautious expectations of "slight sales growth" and a "slight increase" in earnings before special items.
Chief executive Martin Brudermueller said BASF was also closely monitoring the rise in protectionist rhetoric, fuelled by US President Donald Trump's "America First" policies.
"Global economic risks increased significantly over the course of the first half of 2018, driven by geopolitical developments and the trade conflicts between the United States and China, as well as between the United States and Europe," he said.
BASF also announced a major project to build a chemical production site, including a steam cracker, in the Chinese province of Guangdong.
The plants, the first of their kind to be fully owned by a foreign firm in China, are slated for completion by 2026.
BASF said it expected to complete its 5.9 billion euro acquisition of businesses from rival Bayer in August, as part of concessions the latter had to make for a mega-merger with a US company.
The deal will see BASF enter the seeds business and expand its activities in crop protection, biotechnology and digital farming, BASF said.
Shares in BASF plunged more than 2.5 percent to 82.46 euros in mid-day trading, making it the worst performer on Frankfurt's blue-chip DAX index, which was up 0.4 percent.
© 2018 AFP