BASF Sales, Earnings Miss Forecasts on Lower Margins, Write-Downs -- 2nd Update

By Andrea Figueras

BASF said Friday that its 2023 results missed expectations, dragged by impairments and lower margins that weren't offset by cost cuts.

The European chemicals giant's key profit figure--earnings before interest, taxes and special items--fell to 3.81 billion euros ($4.14 billion) from EUR6.88 billion, compared with a EUR4 billion-EUR4.4 billion forecast range and an analyst consensus estimate of EUR3.93 billion.

Net profit was EUR225 million, far below analysts' expectations of EUR2.25 billion, in part due to impairments of EUR1.1 billion related to its surface technologies, agricultural and materials segments. In 2022 BASF had a loss of EUR627 million.

BASF's update illustrates the challenges that incoming Chief Executive Markus Kamieth faces. He is set to succeed Martin Brudermueller from April.

Like many of its peers, BASF had to navigate a tough environment last year, with weaker demand amid slowing global economic growth and high energy prices.

In December, BASF announced an overhaul aimed at lifting profitability at its battery-materials and agricultural units. It has also agreed to sell assets of its shareholding in oil-and-gas producer Wintershall Dea, to the London-based energy company Harbour Energy. However, the German government is reviewing the deal to ensure it doesn't compromise national security.

The company also said its sales dropped 21% to EUR68.90 billion, below guidance for EUR73 billion-EUR76 billion. Analysts expected EUR70.58 billion. Free cash flow is expected to amount to EUR2.7 billion, down from EUR3.33 billion.

BASF will publish its full 2023 report on Feb. 23.

Write to Andrea Figueras at [e-mail]

(END) Dow Jones Newswires

January 19, 2024 04:08 ET (09:08 GMT)

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