Ludwigshafen, Germany – BASF sales were down 5.1% in the third quarter of 2020. Special items related to lower values of a number of assets took EBIT into a loss of EUR2.6bn.
Sales at the company were EUR13.8bn in the third quarter of 2020, compared with EUR14.6bn in Q3 2019. Before special items, EBIT was EUR518m in the quarter, down by EUR475m on the third quarter of 2019.
Brudermuller: Double digit growth each month in China
Volume growth across the busines improved month after month. '[It] turned positive in September,' said CEO Martin Brudermuller, CEO. 'Excluding the plant outage at Port Arthur, Texas volumes in the US would have turned positive in September. In China… we recorded double digit volume growth in each month in each quarter.'
CFO Hans Ulrich Engel explained the reduction in value of the company's assets was a result of expectations that the macroeconomic environment would be considerably weaker in the coming year, allied to weaker demand as a consequence of the pandemic.
He added: 'About EUR1.3bn of impairments were recorded in the chemicals and materials segments because of oversupply of basic chemical and respective margin pressure.'
Engel: EUR1.3bn of impairments in Q3
Across the business, the failure of BASF's cracker in Port Arthur took 1% off sales volumes, which declined by 2% overall in the quarter.
Sales in the materials segment were lower because of reduced demand from the automotive industry. Lower earnings in the monomers division were recorded because of a fall in polyamide sales. This was only partly offset by higher diisocyanates margins and increased MDI volumes sold, the company said.
In the company's materials business, sales declined by 8.2% to EUR2.66bn in the third quarter of 2020. This compares with EUR2.89bn in the equivalent period in 2019.
EBIT before impairments was EUR217m, down 18% from EUR266m in Q3 2019. After impairments, the division recorded a loss before interest and tax of EUR546m. In Q3 2019, EBIT was EUR262m.
