BASF 2Q results underline a clear recovery
The Germany-based company said that group sales for the three month period were up 30 per cent compared to the corresponding quarter last year, to €16.2bn, whereas second quarter EBIT income was up 94 per cent to €2.2bn.
Sales in the first six months of the year rose by 28 per cent to €31.7bn, while EBIT income increased 96 per cent to €4.2bn.
Return to demand for chemicals
The company said that the results were particularly driven by a return in demand in its chemicals business, specifically performance products, functional solutions, plastics and chemicals.
“Our strategy is clear: We are focusing on businesses that are closer to customers and on growth markets,” said Dr. Jürgen Hambrecht, chairman of the board of executive directors.
The financial world reacted negatively to the results, with share prices falling from €46.71 at the beginning of the week, to a rate of €44.45 in mid-morning trading today, although the long-term trend is well up on this time last year, when share prices were trading at below € 34.00.
Performance products focuses on personal care
Although the company supplies chemicals and ingredients to the cosmetics and personal care industry across the board, including plastics for packaging materials, it is the company’s performance products division that has the most involvement with the industry.
The company said that the performance chemicals division increased second quarter sales by 29 per cent, a result that was attributed to higher prices and increased sales volumes.
Likewise, earnings growth increased by 489 per cent to €391m, a figure that was largely down to increased synergies and growth bought about from the integration of the newly acquired Ciba business into the division.
All business divisions and all regions grow
The company stated that all business divisions and all geographic regions contributed to the sales and earnings growth for the quarter.
On a regional basis, sales growth in local currencies increased by 16 per cent in Europe, 42 per cent in North America, 55 per cent in Asia Pacific and by 21 per cent in the South America, Middle East and Africa markets.
Looking ahead to the full financial year, which includes the remaining two quarters, the company said that sales growth would be moderate, in view of the economic outlook, while earnings growth would improve ‘considerably’.
