Industrial plant on the factory premises in Ludwigshafen.
(Photo: dpa)
Dusseldorf The world’s largest chemical company BASF surprisingly increased its forecast for 2022 on Wednesday. In the second half of the year, the group is expecting a gradual slowdown in economic development, which will be more pronounced in Europe than in other regions of the world. However, the strong second quarter makes BASF confident that it will be able to exceed previous expectations for the year as a whole.
For 2022, the chemical company now expects sales of between 86 and 89 billion euros. At best, this is 15 percent more than previously planned. The group announced that profit before special items would be between 6.8 and 7.2 billion euros – and thus slightly higher than previously forecast.
However, the prognosis is subject to numerous reservations. Above all, BASF names a possible shortage in the supply of natural gas, which the group uses as an energy source and raw material. This could lead to production interruptions at the large European locations, above all at the central Verbund site in Ludwigshafen.
So far, BASF has not imposed any restrictions on gas supplies. The group has prepared itself for an emergency and wants to at least partially compensate for the loss of European capacities through higher plant utilization at non-European locations. Wherever possible, gas is to be replaced by oil in the company’s own power plants.
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BASF is considered the largest industrial gas consumer in Germany and would be massively affected by missing deliveries. The world’s largest chemical company had previously announced that if the gas supply permanently fell below half of the demand, the company would have to stop production at its world’s largest site in Ludwigshafen.
Further risks may arise from the further course of the corona pandemic and renewed measures to contain the number of infections. BASF wants to counteract the economic slowdown with cost reductions, but initially did not give any details.
“Despite persistently high raw material and energy prices, we again achieved strong results in the second quarter,” said BASF CEO Martin Brudermüller. The group had already published the basic figures two weeks ago. According to this, sales rose by 16 percent to 23 billion euros compared to the same quarter of the previous year. At EUR 2.3 billion, adjusted profit was at the level of the strong prior-year quarter.
On the one hand, BASF benefited from price increases that the group was able to push through, especially in the specialty chemicals businesses. On the other hand, positive currency effects from the strong dollar helped BASF. This is especially true for the agricultural business, which is strong in North America. The increase in the sales forecast for 2022 is a signal that BASF can continue to benefit from these two effects.
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