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The chemical company BASF was disappointed to present the third quarter figures to Friday's investors. The weakening of activities related to basic chemicals, integration and conversion costs and the low water level in the Rhine weighs on the quarterly figures of the company listed on the DAX. What are the prospects for the stock, what investors should know now. By Annika Kintscher
The quarterly figures of the German chemical giant BASF did not convince investors Friday. In total, the DAX group posted a profit of 1.2 billion euros, ten percent less than in the same quarter of the previous year. Integration and conversion costs are the reason. for the takeover of Bayer stores, so the Ludwigshafener on Friday. And the low water level of the Rhine also weighed heavily on business. "In the third quarter, this has altered us and led to higher production restrictions and transportation costs," said Martin Brudermüller, CEO of BASF.
And BASF can not score points in terms of operating profit (EBIT) before exceptional items. With 1.5 billion euros, the group made a profit 14% lower than the same quarter of last year. This is particularly weak activities in the core segment, chemicals. Here, the result before exceptional items decreased by 23% to 851 million euros. The DAX group suffered from lower sales volumes and lower prices for plastic precursors, as well as increased expenses related to maintenance measures.
But there are also bright spots. Sales rose 8% in the last quarter to 15.6 billion euros. Higher selling prices in all segments were decisive in this respect. The increase in volumes and the acquisition of Bayer's operations in August 2018 also contributed significantly to revenue growth. There was wind again because of the strong euro.
Group in motion
BASF is undergoing renovation. "We have finalized the acquisition of Bayer's key business and badets and reached an agreement on the merger of Wintershall and DEA," said Brudermüller.
The chemical company took over from its competitor Bayer for a total of € 7.6 billion, which represented a significant part of the seeds and herbicides sector. Bayer had to give this up during the Monsanto acquisition to his rival. The net debt of BASF thus rose to 18 billion euros.
In addition, BASF wants to merge its oil and gas subsidiary Wintershall with the former division of RWE, DEA, and bring it to the stock market. By the end of September, an agreement had been signed with the owner LetterOne. As a result, the financial information has been adjusted retroactively to January 1, 2018.
Confirmed annual outlook
BASF confirmed its outlook for the full year on Friday. As a result of this agreement, the group had already adjusted its annual targets in September. Wintershall is no longer included in the outlook and is now presented as an abandoned business. For the current year, sales are expected to slightly exceed the figure of 61.2 billion euros from the previous year. The EBIT adjusted exceptional items is slightly higher than the previous year, which was 7.6 billion euros.
BASF is one of the world's largest companies in the chemical industry. Its product portfolio includes chemicals, pesticides and seeds, as well as oil and gas exploration and production activities.
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Source: BASF SE
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