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1 Year : From Mar 2019 to Mar 2020
By Sara Germano
BERLIN -- BASF SE slashed its profit forecasts on Monday, citing the continuing trade dispute between the U.S. and China as well as sluggish demand in the auto market, furthering the struggles at the German chemicals giant.
The Ludwigshafen, Germany-based firm said that due to slower economic growth and trade conflicts, it now expects income and sales to decline for the full year, compared with earlier forecasts for growth in both segments.
"To date, the conflicts between the United States and its trading partners, particularly China, have not eased -- contrary to what was assumed," the company said in a statement. "In fact, the G-20 summit at the end of June has shown that a rapid detente is not to be expected in the second half of 2019. Overall, uncertainty remains high."
Additionally, BASF said it is challenged by continued slowing demand in the auto market, particularly in China, where production fell 13% in the first half of the year.
In a release of preliminary figures for its fiscal second quarter, the chemical maker said that sales fell 4% to EUR15.2 billion ($17.07 billion) while earnings before interest, taxes, and special items are expected to fall 47% to EUR1 billion. For the full year, the company now forecasts a slight decline in sales and a drop of up to 30% in EBIT before special items.
The company previously predicted sales growth of 1% to 5% for the year and an increase of 1% to 10% in EBIT before special items.
Shares of BASF fell more than 4% to EUR59.49 in after-hours trading on Monday.
The guidance comes just two weeks after the company said it would cut 6,000 jobs, or roughly 5% of its workforce, in an effort to boost profits.
In November, BASF launched restructuring efforts aimed at simplifying the company's central functions and cutting costs in areas from production to research and development.
The company is scheduled to report its full fiscal second-quarter report on July 25.
(END) Dow Jones Newswires
July 08, 2019 17:57 ET (21:57 GMT)
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