Market uncertainties and cautious ordering contributed to a slight decline in third quarter 2019 year-on-year sales for BASF. Sales were €15.2 billion.

Income from operations (EBIT) before special items was €1.1 billion, down by 24% compared with the level of the third quarter of 2018. This was primarily due to significantly lower contributions from the Materials and Chemicals segments.

EBITDA increased to €2.3 billion, compared with €2.2 billion in the third quarter of 2018. EBITDA before special items was down by 8% to €2.1 billion.

EBIT amounted to €1.4 billion, nearly matching the prior-year level. Special items in EBIT totaled €257 million, compared with minus €75 million in the prior-year period. A considerable disposal gain from the sale of BASF’s share of the Klybeck site in Basel, Switzerland, more than offset special charges for restructuring measures, for the integration of the businesses acquired from Bayer and for divestitures.

Net income amounted to €911 million, compared with €1.2 billion in the third quarter of 2018.

Earnings per share in the third quarter of 2019 fell to €1.00 from €1.31 in the prior-year quarter. Adjusted earnings per share were €0.86, compared to €1.51 in the prior-year quarter.

Cash flows from operating activities amounted to €2.0 billion, compared with €2.9 billion in the third quarter of 2018. Free cash flow declined to €1.1 billion as a result of lower cash flows from operating activities.

Comments

The geopolitical conditions are and will remain challenging for BASF. “In particular, the trade conflict between the United States and China is weighing on our business. Moreover, there are uncertainties related to Brexit,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE. “These events are acting as a drag on the economy – not only in export-oriented countries in Europe. The United States is also experiencing a noticeable slowdown. Growth continues in China, albeit at a slower pace.”

“It is not within our power to change the unfavorable underlying conditions,” said Brudermüller. “However, we know exactly what we have to address within BASF. We are rapidly and systematically reshaping our organization – toward greater customer focus and leaner structures.”

BASF Group outlook for 2019

BASF expects a slight decline in sales in 2019. For EBIT before special items, BASF expects a considerable decline of up to 30%. Return on capital employed (ROCE) for the full year 2019 is expected to decline considerably compared with 2018.

The company slightly adjusted its underlying planning assumptions for the oil price: For 2019, BASF now expects an average Brent blend oil price for the year of $65 per barrel - previously $70.

The other assumptions for the global economic environment remain unchanged (growth in gross domestic product: 2.5%; growth in industrial production: 1.5%; growth in chemical production: 1.5%; average euro/dollar exchange rate of $1.15 per euro).

Source: BASF, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.