BASF sticks to targets as trade saps Q1 profits
Frankfurt am Main (AFP)
German chemicals giant BASF stuck Friday to its full-year targets even as it reported falling profits in the first quarter, blaming the drop on global trade tensions' damping effect on business.
Between January and March, the Ludwigshafen-based group saw net profits fall 16 percent year-on-year to 1.4 billion euros ($1.6 billion) -- slightly higher than forecast by analysts surveyed by Factset.
Operating, or underlying profit before special items also fell, shedding 24 percent to 1.7 billion euros, although the group had managed to boost revenues three percent, to 16.2 billion.
"Geopolitical developments and trade conflicts" had subdued activity at many clients like the important car industry, squeezing demand for BASF products, the group said, pointing to tensions "especially between the United States and China".
With prices and sales volumes falling compared with early 2018, the company's acquisition of billions of euros in agrichemical activities from Bayer last year accounted for most of the growth in revenue.
Looking ahead to the full year, BASF still hews to its targets for "slight" growth in sales and operating profit before special items, likely in the low single digit percentage points.
The group is counting on a global economic rebound and an internal restructuring programme to lift its fortunes this year after a tricky 2018 that saw profits tumble.
It plans to spend more than 600 million euros in one-off costs this year to secure structural savings of around 500 million annually.
One element in the reshaping of the firm is the merger of its oil and gas subsidiary Wintershall with Luxembourg-based DEA, finalised Wednesday after green lights from competition authorities.
? 2019 AFP