LUDWIGSHAFEN, GERMANY--(Marketwire - Oct 25, 2012) -
- 3rd quarter 2012:
- Sales up 8% and EBIT before special items up 5% compared with third quarter of 2011
- Successful business development continues in Agricultural Solutions and Oil & Gas segments
- Sales increase, but earnings lower in North America compared to third quarter 2011
- Outlook for full year 2012 confirmed: Increase in sales and earnings targeted
After a solid first half, BASF maintained good business performance overall in the third quarter. Sales rose by 8% to EUR 19 billion, particularly due to higher volumes. At just under EUR 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."
BASF confirms outlook for full year 2012
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. 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 EUR 1 billion.
BASF in North America posts mixed results
In North America, sales decreased by 9% in U.S. dollars and rose by 3% in euro terms compared to the prior year's quarter. "This development was supported by positive currency effects and demand-driven higher sales volumes in the Plastics segment," said Hans Engel, CEO of BASF Corporation, the company's North American subsidiary. "However, our earnings at EUR 229 million were EUR 72 million lower than in the third quarter of 2011, particularly owing to unscheduled plant shutdowns in the Petrochemicals division."
BASF - The Chemical Company
BASF Corporation, headquartered in Florham Park, New Jersey, is the North American affiliate of BASF SE, Ludwigshafen, Germany. BASF has more than 16,000 employees in North America, and had sales of $20 billion in 2011. For more information about BASF's North American operations, visit www.basf.us.
BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. We combine economic success, social responsibility and environmental protection. Through science and innovation we enable our customers in almost all industries to meet the current and future needs of society. Our products and system solutions contribute to conserving resources, ensuring healthy food and nutrition and helping to improve the quality of life. We have summed up this contribution in our corporate purpose: We create chemistry for a sustainable future. BASF posted sales of about EUR 73.5 billion in 2011 and had more than 111,000 employees as of the end of the year. Further information on BASF is available on the Internet at www.basf.com.