Ludwigshafen, Germany – Preliminary figures released by BASF suggest that sales dropped by a quarter in the second quarter of 2023. This was below average analyst expectations of €19.4m.
The fall, from €23.0m in the 2022 quarter to €17.3m this year, was attributed to considerably lower prices and volumes. Negative currency effects also contributed.
EBIT before special items of €974m was in line with expectations, below the €2.35m in the 2022 quarter, and slightly below analyst estimates of €1.0bn. Earnings from chemicals and materials were notably weaker.
Net income was also in line with expectations, at €499m, down from €2.1bn in the 2022 quarter. This was below the €729m expected by the analyst community.
As a result, the company has cut its full-year estimated sales from €84-87bn to €73-76bn. The EBIT outlook for the full year is also being reduced, from €4.8-5.4bn to €4.0-4.4bn.
Although global GDP was up in the first half of the year, the company said, this was driven by the service sector, and global industrial production continued to slow, having a noticeable knock-on effect on chemicals production.
While it does not anticipate further weakening in global demand because of the customer destocking that has already taken place, it still expects demand for consumer goods to be lower than previously expected. Margins will remain under pressure.
The company’s full half year results will be published on 28 July.