BASF's 2007 op income hits record, Q4 profits down

Meanwhile, the company’s fourth-quarter operating profits before special items fell 5.6% due in part to maintenance shutdowns at its petrochemicals plants, the company, the world’s biggest chemicals firm by sales, said.

"We posted higher sales volumes in almost all areas of our portfolio [in 2007]. In many businesses this was associated with increases in sales prices due to continued strong demand and higher raw material costs," it added.

The firm recorded an 18% increase in its chemicals operating income to over €2bn during 2007, while that for the plastics segment rose 9.1% to €1.3m.

BASF’s sales were 10.2% higher at nearly €58bn, driven by organic growth and the positive developments of the businesses it acquired in 2006, it said.

"Acquisitions, especially the businesses acquired in mid-2006, contributed €3.6bn to the sales increase," BASF added.

Currency effects reduced sales by 3.8%, or nearly €1.2bn, in 2007, the firm said.

"Our business has developed successfully since the beginning of 2008. The level of orders remains strong," BASF added.

The highest contribution to the group’s sales performance came from the chemicals division, which saw revenues rise 22% to around €14.2bn, followed by performance products at €11.7bn, up 15.4%.

Within chemicals, petrochemicals contributed 40% to sales, catalysts 34% and intermediates 18%, BASF said.

The highest contribution in performance products sales came from functional polymers and performance chemicals followed by coatings and construction chemicals, it added.

Styrenics sales at 39% were the highest contributor to the plastics division revenues, followed closely by polyurethanes at 38% and performance polymers at 23%, BASF said.

Agricultural products sales were 1.1% higher at nearly €5bn, on strong demand for BASF’s innovative products and favourable market developments.

"Sales in the fine chemicals division declined slightly due to the exit from the lysine and premix businesses," BASF said.

The oil and gas division’s overall performance declined as higher sales and volumes in natural gas trading could not offset the fall in exploration and production revenues, it added.

The company expected its business to develop positively in the next two years, assuming a moderate global economic slowdown, 2.8% growth in chemical production, declining interest rates in the US with modest knock-on effects for Europe, an average $1.45/euro exchange rate, and $78/bbl oil prices, it said.

"In 2008, assuming there are no changes made to our portfolio, we aim to increase sales and improve income from operations before special items slightly," BASF said.

($1 = €0.68)

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