24 February 2012 06:54 [Source: ICIS news]
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SINGAPORE (ICIS)--German chemicals major BASF reported on Friday a 2.8% year-on-year increase in its fourth-quarter 2011 net profit to €1.13bn ($1.51bn) on the back of strong revenue growth.
However, earnings remained under pressure from a slowdown in orders amid ongoing worries about the health of the global economy, BASF said in a statement.
The firm’s sales in the fourth quarter grew by 10% year on year to €18.1bn in the fourth quarter, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose to €2.9bn, from €2.7bn in the same period a year earlier, BASF said.
However, the firm’s fourth-quarter earnings before interest and taxes (EBIT), before special items, fell by 14% year on year to €1.5bn, the company said.
“The trend that the company observed at the beginning of the second half of the year continued,” the company said.
“Customers were more cautious in their ordering, reduced their inventories and put off orders in expectation that the economy would decline and prices could possibly soften,” it added.
BASF’s sales from its chemicals division rose to €3.1bn in the fourth quarter of 2011, compared with €2.9bn in the same period a year earlier, on the back of higher prices across all of its segments, the company said.
“Sales in the chemicals segment rose significantly compared with the previous year, mostly as a result of higher prices,” it said.
For the full year of 2011, the firm’s overall net profit rose by 35.8% year on year to €6.19bn, with sales up by 15.1% at €73.5bn.
Looking ahead, the firm said it aims to exceed the 2011 record levels in sales and EBIT before special items.
Earnings in 2012 will be buoyed by the resumption of crude oil production in Libya as well as growing volumes in the chemicals business, it said.
“We expect the global economy to pick up speed over the course of 2012 following a moderate start,” said Kurt Bock, chairman of BASF’s board of executive directors.
“Uncertainties due to the sovereign debt crises, in particular in Europe and the US, will dampen growth prospects,” Bock said.
“Positive impetus for the chemical industry will again mainly come from the emerging markets,” he added.
Additional reporting by Samuel Wong
($1 = €0.75)
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