BASF Posts Solid 2008
Posted: February 26, 2009
In fiscal 2008, BASF posted a sales gain of 8%, to €62.3 billion. This was primarily due to higher prices in all divisions. However, BASF was unable to pass on fully raw material prices, which were volatile and higher on average than in 2007. Income from operations before special items was on course for a new record up to the fourth quarter. At just under €6.9 billion at the end of the year, however, it was 10% lower than the record amount posted in 2007. Production capacities and investments worldwide are being tailored to the drastic decline in demand, and the implementation of restructuring and efficiency programs is being accelerated.
“With our diversified portfolio, we are far better positioned in this recession than other companies in the chemical industry," said Jürgen Hambrecht, chairman, BASF. "Strong [business units]—such as crop protection, nutrition, cosmetics, hygiene as well as oil and gas—act as stabilizing factors. Right now it is particularly important that we are very solidly financed and have one of the best ratings in the chemical industry. Our strengths include a high free cash flow, which, as in previous years, significantly exceeded €2 billion in 2008.
“2009 will be a year of unprecedented challenges. Following the dramatic drop in our global business in the fourth quarter of 2008, demand for chemical products has not picked up since the start of 2009. A reversal of the trend is not yet in sight. On the contrary: The situation in our sales markets is worsening, and inventory levels in the value chains are still too high. As a result, the chemical industry is continuing to shrink.”
Sales in the performance products segment rose 1% compared with 2007. The acrylics and dispersions division contributed mainly to this increase. The segment’s earnings improved thanks to a further increase in earnings in the care chemicals division.
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