BASF Expects Swing to 3Q Net Loss; Issues 2020 Forecast

   By Joshua Kirby 
 

BASF SE said Friday that it expects to swing to a net loss for the third quarter due to impairments and restructuring, and it issued guidance for the full year.

The German chemical company reported a preliminary net loss of 2.12 billion euros ($2.49 billion) for the quarter, down from a net profit of EUR911 million a year earlier and below consensus estimates.

BASF expects a third-quarter loss before interest and taxes of EUR2.64 billion, compared with EBIT of EUR1.34 billion a year prior.

Earnings were hit by coronavirus-related impairments relating to weaker demand in the automotive and aviation industries that amounted to EUR2.8 billion, BASF said, as well as provisions for restructuring.

Quarterly sales are expected to decline 5% on year to EUR13.81 billion from EUR14.56 billion.

For the full year, BASF expects EBIT before special items of between EUR3.0 billion and EUR3.3 billion--down from EUR4.64 billion in 2019--and sales of between EUR57 billion and EUR58 billion, compared with EUR59.32 billion a year earlier.

"As well as weaker demand, the company expects pressure on margins to continue, especially for basic chemicals, which will be partially offset by fixed cost savings," the company said.

BASF will report final third-quarter results on Oct. 28.

Write to Joshua Kirby at [e-mail]

(END) Dow Jones Newswires

October 09, 2020 09:04 ET (13:04 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.