Advertisement
News
Advertisement

High Raw Material Costs Hold Back BASF Profit

Fri, 02/24/2012 - 5:42am

FRANKFURT, Germany (AP) — Rising raw materials prices and weaker demand in a slowing economy held back fourth-quarter profits at German-based chemical, plastics and oil company BASF SE.

But the company showed a strong result for the full year, raised its dividend and predicted things would pick up again in the second half. BASF shares traded up 2.2 percent at €66.01 in morning trading in Germany.

Net profit rose 3 percent in the fourth quarter to €1.13 billion ($1.5 billion). The figure compared to €1.10 billion in the same quarter a year earlier.

Revenues rose 10 percent to €18.07 billion, with sales up across most of the company's divisions as the company raised prices to offset the higher raw materials costs. But less robust demand restrained profits.

The chemicals division saw earnings, measured before interest and taxes, slip 29 percent to €381 million while earnings for the plastics division fell 60 percent to €110 million, despite higher sales.

For 2011, net income rose strongly helped by a strong first half and was up 35.8 percent to €6.19 billion on sales that increased 15 percent to €73.50. The dividend has also been raised to €2.50 per share from €2.20 per share.

BASF set 2012 targets of increased sales and earnings and said it foresaw an economic rebound in the second half of the year despite ongoing worries over the impact of too much government debt in Europe and the United States. It said earnings at its oil and gas unit would be helped as production in Libya, interrupted by the country's civil conflict, continued to pick up. Onshore production began in mid-October with 20,000 barrels per day and reached 60,000 barrels per day by the end of the year.

"We expect the global economy to pick up speed over the course of 2012 following a moderate start," CEO Kurt Bock said in a statement. "Uncertainties due to the sovereign debt crises, in particular in Europe and the United States, will dampen growth prospects."

BASF SE, based in Ludwigshafen, produces chemicals and plastics as well oil and gas and agricultural herbicides and fertilizers.

Advertisement

Share this Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading