LUDWIGSHAFEN, Germany – BASF’s sales and earnings were again negatively impacted by the ongoing global economic crisis in the second quarter of 2009. The effects on business were especially pronounced in the Chemicals, Plastics and Functional Solutions segments. Sales in the oil and gas business also declined as a result of lower sales volumes of gas and a considerably lower oil price. The company’s agricultural products business posted higher sales and earnings.
Sales in the first half of 2009 amounted to EUR 24.7 billion, or 23 percent less than in the same period of 2008. Income from operations (EBIT) before special items fell by 55 percent in the first half to approximately EUR 2.1 billion.
Second-quarter sales dropped 23 percent to EUR 12.5 billion. Lower volumes and prices contributed 18 percent and 13 percent, respectively, to the sales decline. Currency effects were positive and contributed 3 percent to sales. The Ciba businesses, which were acquired on April 9, boosted sales by 5 percent. EBIT before special items fell 53 percent to EUR 1.1 billion. However, both sales and EBIT before special items improved compared with the first quarter.
“Overall, we think that the downturn seems to have bottomed out and there seems to be stabilization at a low level. The trough appears to have been reached in North America, and China is again growing faster. But we see no signs of a sustained upturn. There is still the danger of another painful setback due to overcapacities, bankruptcies and growing unemployment,” said Chief Financial Officer Kurt Bock.
In view of the economic environment and the expenses resulting from the Ciba integration, BASF expects a significant decline in sales and earnings in 2009. “We are therefore unlikely to achieve our goal of earning our cost of capital in 2009,” said Bock.