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The integration and conversion costs weighed heavily on BASF Chemicals' results in the third quarter. In addition, higher fixed costs were incurred for plant maintenance and significantly higher raw material costs. The low level of Rhine water has also left its mark. "In the third quarter, this bothered us and led to production restrictions and higher transport costs," Martin Brudermüller, Group CEO, said on Friday.
In the third quarter, earnings attributable to shareholders decreased by 10% to 1.2 billion euros, down from the previous year, according to BASF
in Ludwigshafen announced. Analysts were expecting something more here. BASF's stock price fell 1.9% early in the session. In the first reactions to the results, the traders were particularly dependent on the very fragile core business of the chemical giant Ludwigshafen.
For the moment, there is a lot going on at BASF. The Ludwigshafener took over from its rival, pesticides, seed types and digital agriculture from Bayer, for a total amount of 7.6 billion euros. The Leverkusen had to give them back during Monsanto's mega takeover. In addition, BASF wants to oil– and its subsidiary Wintershall merge with the former RWE division (RWE) Dea and then become public. As a result of the proposed merger, BASF's oil and gas activities will no longer be fully consolidated. As a result, the company adjusted the annual targets for 2018 at the end of September.
"The challenges of the macroeconomic environment are increasing," warned Brudermüller. "This is also reflected in our results for this third quarter of 2018." Adjusted earnings before interest and taxes (EBIT) decreased by 14% between July and September to stand at 1.47 billion euros. The decline in profits does not exclude any remaining divisions at BASF.
Just for basic chemicals, profits fell nearly a quarter from the previous year. Among other things, the significantly higher oil price, which reduces margins for petrochemicals, was perceptible here. In the crop protection and seed sector, BASF lost some weight as a result of the acquisition of Bayer's operations.
Consolidated sales grew by 8% to € 15.6 billion thanks to Bayer's acquired business. In addition, the company benefited from higher sales prices and volumes. Again on the currency side, the euro absorbed a small part of the rise.
Its annual targets, adjusted by the Dea agreement at the end of September, confirmed BASF. The amount adjusted for exceptional items is expected to be slightly lower than the previous year 's figure of 7.6 billion euros. Without excluding exceptional items, BASF expects a significant decline in EBIT. Sales are expected to slightly exceed 61.2 billion euros in 2017. / MNE / she / FBA
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Source: BASF SE
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