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BASF posts higher earnings, flat sales; says no economic upturn in fourth quarter

1:26 AM MDT | October 25, 2013 | Natasha Alperowicz

BASF today reported an 18.5% increase in third-quarter net income to €1.1 billion ($1.5 billion) on 1.5% higher sales of €17.7 billion. Ebitda was 16.5% higher at €2.5 billion and earnings before interest and tax (Ebit) rose 20% to €1.7 billion. “The increase in earnings was largely due to higher contributions from the functional materials and solutions and performance products segments in addition to lower charges in ‘other’,” said Kurt Bock, chairman. BASF in its third quarter results under ‘Other’ includes charges for the long-term incentive program. Earnings per share were €1.20 compared with €1.01 in the third quarter of 2012.
BASF has confirmed its outlook for the whole of 2013 but said it does not foresee an upturn in the economy in the fourth quarter. It forecasts growth in global chemical production of 3.1% for the whole of 2013. “We anticipate uneven development marked by economic uncertainty. Currency effects will continue to negatively impact sales and earnings in the fourth quarter. Nevertheless, we still aim to exceed the 2012 levels in sales and Ebit before special items,” Bock says.
In addition to innovation-driven acquisitions and investments in its integrated production system, BASF is continuing with restructuring of its portfolio, including the recently announced restructuring of  performance products. This includes the elimination of 650 jobs, closure of a pigments plant in the United Kingdom, possible divestment of a plant in the Netherlands and the restructuring of a unit in France.  BASF, the market leader in pigments, is boosting its Nanjing, China operation.
The chemicals segment reported an 8% drop in sales to €4.2 billion and a 9% lower Ebitda of €718 million. Performance products’ sales were flat at €3.94 billion with Ebitda 1.9% higher at €532 million. Functional materials and solutions reported a 3.1% rise in sales to €4.44 billion and a 17.4% rise in Ebitda to €405 million. Agricultural solutions’ sales were 4.6% higher at 1.05 billion with 2.9% higher Ebitda at €210 million. Oil & gas was the star of the show reporting a 25.4% increase in sales to €3.13 billion with Ebitda rising 13.3% to €726 million.

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