BASF Q2 Profit Down, Confirms FY18 View For Weak EBIT; Stock Dips

Shares of BASF SE (BFA.L,BASFY.PK) were losing around 3 percent in the morning trading after the German chemicals giant reported Friday lower profit in its second quarter, despite higher revenues.

Looking ahead, for 2018, BASF confirmed its sales and earnings forecasts, expecting slight sales growth, a slight increase in EBIT before special items, but a slight decline in EBIT.

Furthermore, BASF said it expects a significant premium on cost of capital with a considerable decline in EBIT after cost of capital.

With a view to the current year, Martin Brudermüller, Chairman of the Board of Executive Directors of BASF said, “Global economic risks increased significantly over the course of the first half of 2018, driven by geopolitical developments and the trade conflicts between the United States and China, as well as between the United States and Europe. We are monitoring these developments and the potential effects on our business very closely.”

For the second quarter, net income declined 1% year-over-year to 1.48 billion euros. Earnings per share dropped 1 percent to 1.61 euros from 1.63 euros last year.

Adjusted net income was 1.62 billion euros, compared to 1.64 billion euros. Adjusted earnings per share were 1.77 euros compared to 1.78 euros.

EBIT grew 5 percent to 2.29 billion euros, and EBIT before special items improved 5 percent to 2.36 billion euros compared to 2.25 billion euros, largely thanks to the significantly improved contribution from the Oil & Gas segment..

EBITDA before special items was nearly flat at 3.295 billion euros, compared to prior year’s 3.291 billion euros.

Second-quarter sales were 16.78 billion euros, up 3% from previous year’s 16.26 billion euros. The company said this was driven by higher prices in all segments, particularly in Functional Materials & Solutions and Oil & Gas. In addition, with the exception of Performance Products, all segments achieved volumes growth.

Sales of 4.1 billion euros in the Chemicals segment slightly exceeded last year, benefited mainly by higher prices.

In Germany, BASF shares were trading at 82.13 euros, down 2.94 percent.

by RTTNews Staff Writer

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