30 July 2009 06:48 [Source: ICIS news]
LONDON (ICIS news)--BASF's second-quarter net profits dropped 73.6% year on year to €343m ($483m) as it continued to be hit by the global economic crisis, the German chemicals major said on Thursday.
Sales were down 23% at €12.5bn, while earnings before interest and tax (EBIT) before special items were 53% lower at €1.1bn, BASF said.
The company said its chemicals sales were down 30% in the quarter.
BASF said the downturn seemed to have bottomed out but it warned of further possible setbacks.
Its hardest hit businesses continued to be chemicals, plastics and functional solutions, largely because of their exposure to the depressed automotive and construction industries, BASF said.
Yet sales in the oil and gas business were down in the quarter on lower gas volumes and the lower oil price, BASF said.
BASF said its agriculture business posted higher sales and earnings.
“Overall, we think that the downturn seems to have bottomed out and there seems to be stabilisation at a low level,” CFO Kurt Bock said.
“The trough appears to have been reached in North America, and China is again growing faster. But we see no signs of a sustained upturn.
“There is still the danger of another painful setback due to overcapacities, bankruptcies and growing unemployment,” he added.
BASF had revised its full-year forecast given the still-depressed economic conditions worldwide and based on a decline in chemicals production of 8% and an average oil price of $55/bbl, among other factors, Bock said.
In view of the economic environment and the expenses resulting from the Ciba integration, BASF said it expects a significant decline in sales and earnings in 2009.
“We are therefore unlikely to achieve our goal of earning our cost of capital in 2009,” Bock said.
($1 = €0.71)
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