Limburgerhof, Germany
April 24, 2008
- Significantly higher sales
and earnings:
Sales up 9 percent, EBIT before special items up 11 percent
- Confident outlook for full
year 2008 confirmed
The
BASF Group has continued on its successful path in the first
three months of 2008. Having posted a further record quarter, it
is confident with regard to the coming months. First-quarter
sales rose by almost 9 percent to €15.9 billion, while
income from operations (EBIT) before special items increased
by more than 11 percent compared with the same period of 2007 to
almost €2.4 billion.
“Our long-term strategy is paying off. That’s most apparent in
turbulent times like the ones we’re currently seeing in the
financial markets. BASF’s strategy is not to try to achieve
improvements over just a few quarters. Instead, we strive
constantly to keep ahead of the global competition over the long
term,” said BASF’s Chairman Dr. Jürgen Hambrecht in his
presentation of the company’s figures for 2007 and the first
quarter of 2008 at the first annual meeting of BASF SE on April
24, 2008 in Mannheim.
First-quarter sales rose significantly in the Chemicals
segment due to higher volumes and prices. All divisions
contributed to the increase in sales with double-digit growth
rates. The excellent earnings level achieved in the same quarter
of the previous year was not reached. This was due to a decline
in margins for cracker products and decreased plant availability
in the Petrochemicals division.
The Plastics segment posted a slight increase in sales
compared with the first quarter of 2007. The rise in sales in
the Polyurethanes division as a result of continued high demand
worldwide more than offset the slight currency-related decrease
in the Performance Polymers division. First-quarter earnings
were considerably higher than in the same quarter of 2007. The
strong increase in the Polyurethanes division more than offset
the slight decline in the Performance Polymers division
Sales in the Performance Products segment were close to
the level achieved in the same quarter of 2007. Higher volumes
in all divisions could not fully offset divestiture-related
declines in the Care Chemicals division and negative currency
effects. Earnings improved. Good business performance in the
Care Chemicals division contributed to this. Prices of vitamins,
in particular, were increased, and fixed costs were reduced.
Sales in the Functional Solutions segment increased
slightly due to higher volumes and prices. The Catalysts
division in particular made a significant contribution to this
rise despite negative currency effects. Earnings decreased.
Considerably higher earnings in the Catalysts division could not
fully offset declines mainly in Construction Chemicals and also
in Coatings.
Sales in the Agricultural Solutions
segment increased due to higher volumes and sales prices
compared with the first quarter of 2007. Earnings therefore also
increased significantly.
The strongest sales growth was again posted in the Oil & Gas
segment. This was due to higher crude oil prices and increased
natural gas production in the Exploration & Production business
sector as well as sales volume increases in the Natural Gas
Trading business sector. The Oil & Gas segment also posted the
highest increase in income from operations. The decline in
earnings in the Natural Gas Trading business sector was more
than offset by the volume and price-related increase in the
Exploration & Production business sector.
Special items in EBIT were related to expenses for
restructuring that are recorded under “Other” until they are
implemented in the course of the year. Compared with the same
period of 2007, first-quarter EBIT rose by almost 15
percent to €2.3 billion.
Income before taxes and minority interests rose by
approximately 14 percent to just under €2.2 billion. At 41
percent, the tax rate was at the same level as in the first
quarter of 2007. Net income increased by 13 percent to almost
€1.2 billion compared with the first quarter of 2007.
Earnings per share rose to €2.48 from €2.08 in the first
quarter of 2007.
Confident outlook for full year 2008 confirmed
Hambrecht remains confident for full year 2008 and expects
global economic growth and growth in chemical production
excluding pharmaceuticals of 2.8 percent. The company is basing
its estimates on an average oil price of $90 per barrel and an
average euro/dollar exchange rate of $1.50 per euro in 2008.
“The strong start to the first quarter confirms our positive
outlook for 2008. Assuming that there are no changes to our
portfolio, we aim to increase sales and improve income from
operations before special items slightly in 2008. We expect to
grow faster than the chemical market each year, and we are
confident of earning our cost of capital in any given year,”
said Hambrecht.
Double-digit sales growth in Europe
Sales by location of company in Europe increased by 14
percent in the first quarter of 2008. Income from operations
before special items rose by €195 million to almost €1.8
billion. The increase in the Chemicals segment was due in
particular to the significant increase in sales and earnings in
Inorganics. Business in the Agricultural Solutions segment, in
particular with fungicides, developed positively as a result of
favorable weather conditions and a good start to the season. The
Oil & Gas segment posted higher sales and earnings, in
particular as a result of higher oil prices.
Sales by companies in North America increased by 9
percent in dollar terms and decreased by 4 percent in euro
terms. At €268 million, EBIT before special items was slightly
higher than in the first quarter of 2007. Earnings increased
significantly in the Plastics segment but declined in the
Functional Solutions segment. Weaker cracker margins especially
impacted earnings in the Chemicals segment.
In Asia Pacific, companies recorded a sales increase of
17 percent in local currency terms and 7 percent in euro terms.
EBIT before special items rose by €17 million to €224 million.
The Plastics segment made an important contribution to this as a
result of a significant increase in the volumes and sales of
polyurethanes. Increasing demand and higher sales prices for
vitamins were recorded in the Performance Products segment.
Declines in the Chemicals segment were more than offset.
In South America, Africa, Middle East first-quarter sales
by location of company rose by 18 percent in local currency
terms and by 10 percent in euro terms. EBIT before special items
climbed €23 million to €76 million. Sales and earnings, in
particular for fungicides, improved significantly in the
Agricultural Solutions segment. In the Construction Chemicals
division, activities developed favorably in the region. The same
was also true in the Coatings division due to higher demand for
architectural and automotive coatings.
BASF is the world’s leading chemical company: The Chemical
Company. Its portfolio ranges from oil and gas to chemicals,
plastics, performance products, agricultural products and fine
chemicals. As a reliable partner BASF helps its customers in
virtually all industries to be more successful. With its
high-value products and intelligent solutions, BASF plays an
important role in finding answers to global challenges such as
climate protection, energy efficiency, nutrition and mobility.
BASF has more than 95,000 employees and posted sales of almost
€58 billion in 2007. BASF shares are traded on the stock
exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). |
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