BASF confirms weaker 2018 forecast after profits dive
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Frankfurt am Main (AFP)
German chemicals giant BASF confirmed a full-year outlook for weaker profits Friday after a slowdown in the third quarter, adding that one-off factors weighed especially strongly on its bottom line.
Net profit at the Ludwigshafen-based group fell 10 percent year-on-year, to 1.2 billion euros ($1.36 billion), in line with forecasts from analysts surveyed by Factset.
Operating, or underlying profit before special items, fell 14 percent to 1.47 billion euros, although revenues were eight percent higher at 15.6 billion as BASF raised prices and sales volumes.
Chief executive Martin Brudermueller pointed to an unfavourable comparison with last year's "very strong" third quarter as one reason for the profits slump, as well as negative currency effects.
Other factors also weighed on BASF, such as the low level of the Rhine after a hot, dry summer in Germany, which Brudermueller said "led to production cutbacks and higher transportation costs" at the firm's riverside HQ.
Costs also came due for integrating 7.6 billion euros of seeds and pesticides businesses, which rival Bayer was forced to sell to earn competition authorities' green light for its takeover of US-based Monsanto.
The third quarter also brought a merger of BASF's oil and gas subsidiary Wintershall with Russian-owned DEA.
BASF reaffirmed its cautious full-year forecast, which it had already lowered in September following the DEA deal.
The group said it expects "slight sales growth" for 2018 compared with the previous year and a "slight decrease" in operating profit before special items.
© 2018 AFP