The macroeconomic environment became challenging for BASF in the second quarter of 2019.
“There is currently high uncertainty, low visibility and poor predictability,” said Dr Martin Brudermüller, chairman of the board of executive directors of BASF. “Our second-quarter results clearly reflect this.”
Compared with the second quarter of the previous year, sales decreased by 4% to $16.9bn. Prices were down by 2%, mainly driven by the isocyanates and cracker products businesses. Sales volumes declined by 6%. All segments recorded lower volumes, except for nutrition and care.
The decline was most pronounced in the chemicals and agricultural solutions segments. The reasons for this were the scheduled steam cracker turnarounds in Antwerp, Belgium, and Port Arthur, Texas, as well as the unfavourable weather conditions in North America affecting the agricultural solutions segment. Portfolio effects accounted for plus 2% thanks to the seeds and non-selective herbicide businesses acquired from Bayer. Currency effects amounted to plus 2%.
EBITDA before special items decreased by 27% to $2.22bn. EBIT before special items came in at $1.11bn, 47% lower than in the prior-year period.
The global trade conflicts, particularly between the United States and China, are a serious concern for the company.
“We followed the general assessment that a solution would be found by the middle of the year. But now it seems the situation will not ease for some time,” said Brudermüller.
BASF already published its key figures in an ad-hoc release on 8 July. The company’s 2019 outlook presented in February of this year was based on certain macroeconomic and geopolitical assumptions.
“Unfortunately, many of these did not materialise and we therefore had to lower our outlook,” said Brudermüller. He added that the adjusted outlook would not change BASF’s progressive dividend policy. “We want to increase our dividend per share each year.”
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