May 2 (Bloomberg) -- BASF SE, the world’s biggest chemical maker, reported first-quarter earnings that beat analyst estimates on increased demand from the agricultural and automobile industries.
Earnings before interest, tax and one-time items fell 3.3 percent to 2.14 billion euros ($2.97 billion) in the quarter, the Ludwigshafen, Germany-based company said in a statement. Analysts had predicted 2.12 billion euros in a Bloomberg survey.
Chief Executive Officer Kurt Bock today reiterated a target for annual earnings to rise even though the chemical maker is divesting a gas trading unit mid-year. BASF is pushing a savings drive that includes 1,660 job cuts to help reach an operating profit target of 22 billion euros by the end of the decade.
“We sold more,” Bock said in today’s statement. “We had a good start to the year in our chemicals business and in the agricultural solutions segment.” The company is holding its annual shareholder meeting today in Mannheim, across the Rhine River from its Ludwigshafen headquarters.
Sales fell 1.1 percent to 19.5 billion euros in the first quarter, compared with a 19.3 billion-euro analyst estimate. Net income gained 2.1 percent to 1.48 billion euros.
The manufacturer is restructuring its nutrition and health division, paring 260 jobs and selling a low-grade omega-3 plant in Norway, it said last week. That comes on top of job cuts at the paper chemicals, pigments and construction chemicals units.
The company has gained 7.7 percent in Frankfurt trading this year, boosting the market value to 76.6 billion euros.
Revenue for the full year will probably decline “slightly,” BASF reiterated today. While the planned exit of gas trading and storage in the middle of the year will reduce sales “considerably,” some of that loss will be mitigated by growth in fungicides, herbicides and chemicals.
BASF is transferring its gas trading unit to OAO Gazprom in an asset swap and in return will receive stakes in two Siberian oil fields.
BASF’s supervisory board will propose former CEO Juergen Hambrecht as chairman at the annual shareholder meeting today. The board is also suggesting British citizen Alison Carnwath for the chemical maker’s board for the first time. Current chairman Eggert Voscherau, 70, and Max Dietrich Kley, 74, are not available for re-election.
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