BASF Group: EBIT before special items declines in second quarter
Customer industries were affected to varying degrees: BASF was particularly negatively impacted by the collapse in demand from the automotive industry, while demand from the detergent and cleaner industry and the food industry was stable. BASF was able to continue production at all important sites worldwide.
“The corona pandemic is still a huge challenge for all of us,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF, who presented the second-quarter figures together with Chief Financial Officer Dr. HansUlrich Engel. Brudermüller also sees opportunities: “This situation is a catalyst for change and a chance to do many things differently. At BASF, we have quickly adapted to new processes. Everyone is very open to virtual communication, internally and with our customers.”
No concrete statements on the development of sales and earnings for the full year
Given the continued high level of uncertainty and low visibility surrounding economic developments, BASF still does not make any concrete statements on the development of sales and earnings for the full year 2020. For the third quarter, BASF does not expect EBIT before special items to improve significantly compared with the second quarter of 2020, in part due to the generally lower demand in August and the seasonality of the Agricultural Solutions business.
Sales in the second quarter decreased by 12 percent to EUR 12.7 billion. This was primarily attributable to lower sales volumes of minus 11 percent. Prices decreased by 1 percent, mainly due to lower prices for upstream chemicals. Considerably higher prices in the Surface Technologies segment and slightly higher prices in the Agricultural Solutions segment could only partially offset this. Prices in the Surface Technologies segment were supported by higher prices for precious metals in the Catalysts division. Portfolio effects contributed plus 1 percent and were mainly related to the acquisition of Solvay’s polyamide business. Currency effects amounted to minus 1 percent. The devaluation of the Brazilian real and the Argentinian peso were the main reasons here.
Income from operations (EBIT) before special items came in at EUR 226 million, 77 percent below the level of the second quarter of 2019.