Fitch downgrades BASF, expects much lower Q1 earnings

29 April 2009 11:27  [Source: ICIS news]

LONDON (ICIS news)--Fitch Ratings expects BASF to report significantly lower first quarter operating earnings and has downgraded the German chemical group's credit rating, it said on Wednesday.

“BASF’s portfolio of chemicals contains around 40% of commodity products, the bulk of which are under severe volume and pricing pressure with no recovery in sight,” the credit watchdog said in a report.

Fitch added that BASF’s less-cyclical specialty chemicals sales were heavily exposed to the sharp downturn in the global automotive, construction and textile end-user markets.

Fitch downgraded the company’s long-term credit rating to A+ from AA-, reflecting the “gradual deterioration in BASF’s financial profile as a result of its shareholder-friendly policies and its acquisitive strategy”.

BASF’s rating was given a negative outlook on Fitch’s view that weaker market conditions or an aggressive financial policy could further reduce its ability to protect liquidity.

Fitch’s long term credit rating for Ciba, which was recently acquired by BASF, was upgraded to A+ from BBB before being dropped from coverage.

On 9 April, BASF closed its acquisition of Ciba and started the process of fully integrating the Swiss specialty chemicals producer into its operations.

The company reports its first quarter earnings on Thursday 30 April.

To discuss issues facing the chemical industry go to ICIS connect
For more on BASF visit
ICIS company intelligence


By: Mark Watts
+44 20 8652 3214



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index