BASF confident on earnings, sales as growth slows
08 July 2008 11:01 [Source: ICIS news]
LONDON (ICIS news)--BASF still aims to raise full-year operating earnings slightly on the back of higher sales, the German chemicals giant said on Tuesday.
The company’s full-year outlook is unchanged despite the worsening operating environment, slower chemicals growth expectations, a higher oil price and the adverse euro/dollar exchange rate.
The group’s chemical production growth forecast for the year has been cut to 2.4%, executive board chairman Jurgen Hambrecht told financial analysts in London.
In its first-quarter report, BASF forecast global chemicals output growth excluding pharmaceuticals of 2.8%.
BASF, which has a significant oil and gas business, is basing its assumptions on an average oil price in 2008 of $120/bbl, compared with its $90/bbl earlier annual average forecast. Its US dollar exchange rate assumptions have shifted to $1.55 to the euro from $1.50.
Chemicals production will shrink 1.3% in the
Data posted on its website on Tuesday put estimated Europe chemicals production growth for 2008 at 1.4% with growth in Asia excluding
BASF said it expected approximately 5% of its EBIT (earnings before interest and tax) to be at risk from the expected squeeze on cracker margins between 2009 and 2011.
The company uses more than 95% of cracker products internally but does not make polyolefins. It is a net purchaser of propylene and aromatics.
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