Germany's BASF reports lower net profit in 2019
German chemical giant BASF says weak performance in basic chemicals resulted in lower sales and net profits.
Chemical giant BASF reported lower sales and net profit in 2019 as a result of a weak performance in the basic chemicals business.
Its sales declined 2 percent to 59.3 billion euros (US$65.28 billion) and earnings before interest and taxes slumped to 4.1 billion euros from 6 billion euros a year earlier, according to its financial report released on Friday.
The net profit of its basic chemicals business more than halved to 1.8 billion euros because of lower prices and overall weaker demand, which can't be offset albeit the strong performance of some downstream sectors such as industrial solutions.
“Growth in industrial and chemical production was significantly slower than expected. Demand from many key customer industries, especially from the automotive sector, declined considerably in 2019, a challenging year with strong global economic headwinds,” said CEO Martin Brudermüller in a statement.
This year, BASF expects sales can rise to up to 63 billion euros and net earnings advance to 4.8 billion euros despite increasing uncertainties.
It anticipates that the negative effects of the coronavirus will have a significant impact worldwide, particularly in the first and second quarters. The company forecasts global chemical production to grow by 1.2 percent, compared with 2019’s 1.8 percent.
Despite the adverse outlook, the company is confident its sales and net profits will rise in 2020, as its customer industries are expected to grow a little.
“We expect slight growth in most of our customer industries. For the automotive industry, however, we anticipate a continued decline in production,” Brudermüller said.
