Ludwigshaven, Germany
August 1, 2007
• Volume demand remains strong:
Second-quarter sales climb to €14.7 billion (up 19 percent)
• EBIT before special items reaches €2.0 billion (up 6 percent)
• Further portfolio measures: Strategic options under review for
parts of styrenics business
• Outlook for 2007 confirmed: Significantly higher sales, EBIT
before special items to at least match the previous year’s
record level
BASF
– The Chemical Company – remains in top form: In the second
quarter and first half of 2007, the company again exceeded the
record results posted in the same periods of the previous year.
In the second quarter, BASF increased sales by 19 percent and
income from operations (EBIT) before special items by 6 percent.
Cumulative sales in the first half of 2007 amounted to €29.3
billion, or 18 percent more than in the same period of 2006. In
the first half of this year, EBIT before special items rose by
approximately 10 percent to €4.1 billion.
“Our significant earnings growth demonstrates that BASF has
reached a higher level of sustainable earnings,” said Dr. Jürgen
Hambrecht, Chairman of the Board of Executive Directors of BASF
Aktiengesellschaft when presenting BASF’s latest results.
BASF has entered the second half of 2007 in stronger form than
ever. The demand for chemical products is high, and there are no
signs of a summer slowdown.
BASF confirms optimistic forecast for full-year 2007
Hambrecht expects the economy to continue to develop positively.
For 2007, he anticipates global economic growth of approximately
3.5 percent, although with large variations from region to
region. BASF’s chairman expects an average euro/dollar exchange
rate of $1.35 per euro in 2007. Due to the rise in oil prices,
the company has increased its assumption for the average price
of Brent crude in 2007 to $65 per barrel.
Risks are seen as lying in the renewed significant rise in the
price of oil, the weak U.S. dollar, and tension in conflict
areas around the world.
“In our outlook for 2007 we confirm our optimistic expectations:
We are confident that we will grow faster than the chemical
market. In 2007, we expect significantly higher sales than in
2006. Scheduled plant turnarounds, in particular in the
Petrochemicals division, are likely to reduce earnings by €150
million in the second half of 2007. In addition, we plan to
further increase spending on research and development. We
nevertheless expect full-year EBIT before special items to at
least match the previous year’s record level,” said Hambrecht.
BASF’s Chief Financial Officer, Dr. Kurt Bock, commented on the
positive development of cash provided by operating activities:
“Cash provided by operating activities developed very positively
in the second quarter. The cumulative value for the first half
was in excess of €2.7 billion compared with €2.2 billion in the
first half of 2006.”
Sales in the Chemicals segment rise by 50 percent
Second-quarter sales in the Chemicals segment climbed 50
percent due to higher sales volumes and prices and the
contribution from the acquired catalysts business. EBIT before
special items also rose significantly by more than 70 percent,
with a considerable contribution from the Petrochemicals
division.
In the Plastics segment, sales increased by 10 percent in
the second quarter thanks to higher volumes and sales prices.
Earnings rose by 15 percent. This was due to significantly
higher earnings in the Styrenics division.
In the Performance Products segment, strong sales growth of 37
percent and earnings growth of 24 percent was due primarily to
the inclusion of activities acquired in the previous year. The
Construction Chemicals division grew very strongly in Europe.
In the Agricultural Products & Nutrition segment, sales
increased by 3 percent compared with the second quarter of 2006;
EBIT before special items rose by more than 44 percent. Higher
sales volumes in the Agricultural Products division more than
compensated for negative currency effects. The Fine Chemicals
division posted a significant increase in EBIT before special
items, in particular due to a reduction of fixed costs.
Sales and earnings in the Oil & Gas segment declined
compared with the very high level of the second quarter of 2006
due to lower prices and currency effects.
Double-digit growth in all regions
BASF’s sales increased in all regions in the first half of 2007.
The strongest growth in percentage terms was seen in South
America, Africa, Middle East and in Asia.
In Europe, companies posted total sales of €17.4 billion
in the first half. This corresponds to an increase of 14
percent. EBIT before special items rose by 6 percent to €3.1
billion. This was due to the acquired businesses and organic
growth in the chemical businesses, in particular in
Petrochemicals.
Companies in North America increased sales by 26 percent
in dollar terms and by 18 percent in euro terms in the first
half. EBIT before special items declined by 3 percent to €544
million. This was due to the shutdown of the TDI plant in
Geismar, Louisiana, for a number of weeks, as well as currency
effects and the impact of divestitures in the Agricultural
Products division. The acquired businesses and strong earnings
in the Petrochemicals division were unable to offset this fully.
Growth remains strong in Asia Pacific, where BASF
increased sales by 34 percent in local currency terms and by 27
percent in euro terms. EBIT before special items also rose
considerably by 58 percent to €380 million. The investments in
the Verbund sites in Kuantan, Malaysia, and Nanjing, China, are
paying off. In Africa and the Middle East, sales rose in
particular thanks to the contribution of the Catalysts and
Construction Chemicals divisions.
The region South America, Africa, Middle East also made a
positive contribution. Here, BASF increased sales by 57 percent
in local currency terms and by 51 percent in euro terms. EBIT
before special items rose almost threefold. This was due
primarily to the agricultural products business in South
America. In Africa and the Middle East, sales rose in particular
thanks to the contribution of the Catalysts and Construction
Chemicals divisions.
BASF is the world’s leading chemical company: The Chemical
Company. Its portfolio ranges from chemicals, plastics,
performance products, agricultural products and fine chemicals
to crude oil and natural gas. As a reliable partner to virtually
all industries, BASF’s high-value products and intelligent
system solutions help its customers to be more successful. BASF
develops new technologies and uses them to meet the challenges
of the future and open up additional market opportunities. It
combines economic success with environmental protection and
social responsibility, thus contributing to a better future.
BASF has approximately 95,000 employees and posted sales of
€52.6 billion in 2006. BASF shares are currently traded on the
stock exchanges in Frankfurt (BAS), London (BFA), New York (BF)
and Zurich (AN). |
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