BASF Reports Higher Second-Quarter Pretax Income as Revenue Increases 30%
July 29 (Bloomberg) -- Juergen Hambrecht, chief executive officer at BASF SE, talks about second-quarter profit and plans to outpace global chemical production. The world's biggest chemical company reported profit that beat analysts’ estimates after a recovery in demand and higher prices for products spanning plastics and catalysts. Hambrecht speaks from Ludwigshafen, Germany, with Maryam Nemazee on Bloomberg Television's "Countdown." (Source: Bloomberg)
BASF SE, the world’s biggest chemical company, reported second-quarter profit that beat analysts’ estimates on a recovery in demand and higher prices for products including plastics and catalysts.
Net income rose to 1.18 billion euros ($1.5 billion) compared with 343 million euros a year earlier, the Ludwigshafen, Germany-based company said in a statement today. The median estimate of 11 analysts in a Bloomberg survey was 1.07 billion euros.
BASF said the strength of the rebound in demand helped it surpass expectations. The maker of pesticides and polymers reiterated a forecast that sales growth this year will outperform the wider chemical industry and that earnings will increase “considerably.”
“A strong performance in the chemicals activities yet again, driven by supply constraints,” Annett Weber, an analyst at BHF-Bank, said in a note. “BASF was able to largely pass on higher feedstock costs.”
The German chemical maker rose 0.9 percent to 45.72 euros at 2:43 p.m. in Frankfurt trading.
Investors are mainly focused on the outlook, and BASF’s reiteration of its guidance could hamper the short-term upside, said Ronald Kohler, an analyst at MainFirst Bank AG.
BASF signaled that it may resume dividend growth. Chief Executive Officer Juergen Hambrecht said in the statement that he expects the company to earn a premium on its cost of capital, his prerequisite for maintaining or boosting dividends.
Sales advanced to 16.2 billion euros from 12.5 billion euros, with demand rising across most of the company’s businesses.
To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net Richard Weiss in Frankfurt at rweiss5@bloomberg.net.
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