BASF Reports 1Q 2016 Results

May 2, 2016
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BASF Reports 1Q 2016 Results



In the first quarter of 2016, BASF Group sales decreased by 29% to €14.2 billion compared with the same quarter of the previous year. This was largely on account of the divestiture of the gas trading and storage business, which had contributed €4.2 billion to sales in the first quarter of 2015.

The lower price of oil led to declining sales prices, especially in the Chemicals segment. Overall sales volumes matched the level of the previous first quarter. Volumes increased slightly in the Functional Materials & Solutions, Oil & Gas and Performance Products segments, whereas they decreased slightly in the Agricultural Solutions and Chemicals segments.

“We were able to slightly increase EBIT before special items in the Performance Products, Functional Materials & Solutions and Agricultural Solutions segments,” said Dr. Kurt Bock, chairman of the Board of Executive Directors. The significantly smaller contributions from the Oil & Gas and Chemicals segments reduced income from operations (EBIT) before special items by €164 million to €1.9 billion.

Compared with the previous first quarter, EBIT declined by €129 million to €1.9 billion. EBITDA fell by €78 million to €2.8 billion. At minus €188 million, the financial result was below the level of the first quarter of 2015 (minus €164 million).

Net income rose by €213 million to €1.4 billion. Earnings per share were €1.51 in the first quarter of 2016, compared with €1.28 in the same period of 2015. Adjusted for special items and amortization of intangible assets, earnings per share amounted to €1.64 (first quarter of 2015: €1.43).

At the end of February, BASF reached an agreement with AkzoNobel to sell its industrial coatings business. This will enable BASF to focus even more on its core business with automotive coatings. In April, an agreement was signed to acquire the automotive refinishing business from Guangdong Yinfan Chemistry Co. Ltd., in China. The acquisition strengthens BASF’s position in the rapidly growing market for refinish coatings in China.

“We will continue to refine our portfolio in 2016. Our goal is to concentrate on high-growth businesses,” said Bock.

Sales fell by 19% to €3.1 billion in the Chemicals segment, predominantly as a result of price drops brought about by the decline in raw material prices. Sales volumes decreased particularly in the Petrochemicals division in North America.

Despite higher volumes, sales in the Performance Products segment were €3.8 billion, which was 6% below the level of the previous first quarter, largely on account of lower sales prices. The main factor here was the oil-price-related decline in raw material costs, although ongoing pressure on prices in the hygiene business was additionally responsible.

Sales in the Functional Materials & Solutions segment declined by 4% to €4.4 billion, mainly due to falling sales prices as a particular result of lower prices in precious metal trading. Sales volumes increased, particularly as a result of higher demand from the automotive and construction industries.

In a market environment that remains difficult, sales in the Agricultural Solutions segment declined by 6% to €1.8 billion. Price increases were unable to compensate for lower sales volumes and negative currency effects.

Sales in the Oil & Gas segment fell by 88% to €611 million. The asset swap completed with Gazprom in 2015 meant a lack of contributions from the natural gas trading and storage business in particular. Sales were additionally weighed down by the decline in oil and gas prices.

At €477 million, sales in Other were down 31% compared with the previous first quarter. Lower prices and volumes in the raw materials trading business were largely responsible.