For the year as a whole, the chemical company continues to expect a decline in adjusted operating profit.
(Photo: dpa)
Frankfurt The chemical company BASF has confirmed its annual targets despite a slump in earnings in the first quarter. “BASF started 2023 better than analysts expected. And this in a stagnating and difficult economic environment,” explained CEO Martin Brudermüller on Thursday.
For the year as a whole, he continues to expect a decline in adjusted operating profit (EBIT) to between 4.8 and 5.4 (2022: 6.9) billion euros. Sales are expected to fall to between 84 and 87 (87.3) billion euros.
BASF had already published preliminary quarterly figures on April 12. Adjusted operating profit fell by 31.5 percent to 1.93 billion euros, but was still significantly better than analysts had expected. Sales fell by more than 13 percent to 19.99 billion euros due to lower demand. The development of the world economy is still subject to great uncertainty, the dynamics in industrial and chemical production remain subdued, explained BASF.
The Executive Board will answer questions from shareholders at the Annual General Meeting in Mannheim on Thursday. Fund manager Arne Rautenberg from Union Investment, according to Refinitiv data the eighth largest shareholder at BASF, criticizes the share price development at the company and the weaker development than the global chemical sector in his speech. “BASF is no longer the measure of all things in chemistry,” he explained. “Get the sluggish tanker back on course so that BASF can once again become a success story on the stock exchange.”
In February, Brudermüller announced a new austerity program that is said to cut 2,600 jobs worldwide, almost two-thirds of them in Germany. Several energy-intensive plants at the main plant in Ludwigshafen are to be closed.
>> Read here: Rising energy costs, falling margins – BASF in the Handelsblatt balance sheet check
Almost half of the investments are to flow to Asia in the next few years. Because in China, the world’s largest chemical company is currently building a new Verbund site in the southern province of Guangdong for up to ten billion euros. With this, Brudermüller not only meets with approval. “The Russian attack on Ukraine has shown how quickly geopolitical nightmares can become reality,” Rautenberg said, referring to the conflict between China and Taiwan.
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