Frankfurt The bad news from the chemical industry does not stop: after the specialty chemicals companies Lanxess, Evonik and Clariant, industry leader BASF also has to cut back on its annual targets after a weak second quarter. For 2023, the world’s largest chemical company only expects sales of between 73 and 76 billion euros and an adjusted operating profit (EBIT) of between 4.0 and 4.4 billion, as BASF announced on Wednesday.
So far, the Ludwigshafen-based company had expected a decline in adjusted profit to 4.8 to 5.4 (2022: 6.9) billion euros and sales of 84 to 87 (87.3) billion.
The companies in the sectors are primarily struggling with weak demand and economic headwinds. The recovery expected by many companies in the second half of the year does not appear to be happening, especially in China. Numerous analysts had therefore already expected that BASF would also have to lower its forecasts. They had recently expected the company to generate average sales of EUR 79.8 million and adjusted operating profit of EUR 4.88 billion for this year.
BASF stated that it does not expect any further weakening of demand worldwide for the second half of the year. Customer stocks of chemical raw materials have already been greatly reduced. However, since demand for consumer goods will be weaker than previously thought, the recovery is likely to be tentative. “This will also keep the margins under pressure.”
According to preliminary figures, BASF’s adjusted operating profit fell to 1.0 billion euros in the second quarter (same period last year: 2.3 billion euros). Due to significantly lower prices and volumes, sales shrank by a quarter to 17.3 billion euros and were thus almost two billion euros below analyst estimates.
Association little optimistic
The German Chemical Industry Association (VCI) had recently shown little optimism about economic development. Production is at a very low level, industry sales have been declining for months, and the lack of orders is causing problems for companies. The association will therefore revise its forecast from the spring, announced VCI general manager Wolfgang Große Entrup.
At the semi-annual press conference on July 21, the VCI intends to present its new forecasts for the development of the industry.
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