BASF 2Q Sales Fell, Profit Jumped Due to Wintershall Spinoff -- Update
By Kim Richters
BASF SE (BAS.XE) said Thursday that second-quarter profit jumped
despite a drop in sales after the company booked a sizeable gain
from the spinoff of its oil-and-gas business.
The chemical company's net profit grew to 6.46 billion euros
($7.20 billion) from EUR1.48 billion in the same period a year
earlier. The boost was predominantly due to the merger of BASF's
oil-and-gas business Wintershall and DEA Deutsche Erdoel, which was
completed in May.
Sales fell to EUR15.16 billion from EUR15.78 billion, due to
lower sales volumes in all business segments except nutrition and
care, the company said.
The results follow a warning earlier this month, when BASF said
it would miss expectations due to lower industrial production, a
weak North American agricultural sector and a growth downturn in
the automotive industry.
BASF is in the midst of an overhaul aimed at boosting
profitability. In June it said would cut roughly 5% of its
workforce. Around 1,100 of the 6,000 employees affected have so far
signed severance agreements, the company said Thursday, adding that
it plans provisions of EUR260 million for the cuts.
In the second quarter, BASF's earnings before interest and taxes
before special items--which strips out the effects of the
oil-and-gas deal--was EUR1.05 billion, down 47% from the same
period the previous year. BASF said results were particularly hit
by declining earnings in the chemicals and materials segments.
The company said the macroeconomic environment became
challenging in the second quarter and global trade conflicts such
as the one between the U.S. and China were a "serious concern."
Chief Executive Martin Brudermueller said he didn't expect that
dispute to be resolved before next year. The company initially
estimated it would be resolved by the middle of this year.
BASF backed its outlook for the full year, which it adjusted in
early July. It forecasts a slight decline in sales and a drop of up
to 30% in EBIT before special items.
Write to Kim Richters at firstname.lastname@example.org
(END) Dow Jones Newswires
July 25, 2019 05:30 ET (09:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Historical Stock Chart
From Aug 2020 to Sep 2020
Historical Stock Chart
From Sep 2019 to Sep 2020