Ludwigshafen, Germany - Sales for chemical group BASF rose 6 percent in the second quarter to Euro 19.5 billion ($24 billion) with an earnings (EBIT) rise before special items of 11 percent or by Euro 253 million to Euro 2.5 billion, compared with previous year's Q2.
BASF saw strong business in its Agricultural Solutions business. But the Germany-based chemicals giants saw a "significant decrease in growth in China."
BASF said its business performed solidly in the second quarter. While sales volumes declined in the chemicals business, which comprises the Chemicals, Plastics (which includes BASF's major polyurethanes unit), Performance Products and Functional Solutions segments, the main contribution came from the strong performance of the Agricultural Solutions and Oil & Gas segments.
In the first half of 2012, sales were Euro 40.1 billion, 6 percent more than in the same period of the previous year. At over Euro 5 billion, EBIT before special items matched the level of the first half of 2011.
"Our customers are continuing to act cautiously and are reducing their inventories, also in expectation of falling prices due to declining raw material costs," commented Dr Kurt Bock, BASF chairman, at the results presentation. In addition, Bock said, the Chinese growth engine "has started to stall," leading to a decrease in BASF's sales in local-currency terms in Asia in the second quarter, as they also did in the first quarter of 2012.
Sales in pllastics, which includes the polyurethanes raw materials, surpassed the level of Q2 2011. While sales volumes were weaker, positive currency effects in particular boosted sales growth. Lower margins for some basic products led to a significant decline in earnings, BASF noted.