Wed, Feb 27, 2019 - Page 10 News List

BASF’s profit falls as vehicle woes, trade disputes bite

AFP, FRANKFURT AM MAIN, Germany

German chemicals giant BASF AG yesterday reported its annual profits slumped last year, with knock-on effects from major customer sectors and geopolitical headwinds including trade conflicts taking the business off the boil.

Net profit at the group fell 22.6 percent, to 4.7 billion euros (US$5.3 billion), short of expectations from analysts surveyed by Factset.

“2018 was a year characterized by difficult global economic and geopolitical developments and trade conflicts,” the Ludwigshafen-based firm said in a statement.

“Slowdown in key markets, especially the automotive industry” had weighed on it, the company added, the latest sign of the wider impact of car production bottlenecks linked to new emissions tests in Europe.

Demand from China also fell, in part because of Beijing’s trade showdown with the US, it said.

Operating profit at the group fell 20.5 percent, to 7.6 billion euros, although BASF was able to increase revenues 2.4 percent, to 62.7 billion euros, slightly higher than forecast by analysts.

BASF also had to contend with the impact of low water on the Rhine River after a hot and dry summer in Germany.

“For much of the third and fourth quarter, it was nearly impossible to receive deliveries of raw materials via ship” in Ludwigshafen, it said.

Newly acquired agrichemical businesses bought from Bayer AG braked performance, as they joined in the second half of the year — after most seed providers make the bulk of their profits.

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