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Corporate
BASF claims to be in top form
BASF claims that it is in top form. In both the second quarter and the first half of 2008, the company has again increased sales and income from operations (EBIT) before special items and achieved new records. First-half sales amounted to €32.2 billion, 10 percent more than in the same period of 2007. EBIT before special items in the first six months of 2008 rose by 15 percent to around €4.8 billion. In the second-quarter, BASF increased sales by 11 percent to €16.3 billion, while EBIT before special items climbed approximately 19 percent to €2.4 billion.“Demand for our products remains strong, and the summer lull does not seem to be very pronounced. However, sales prices have to be increased considerably in some cases in order to pass on significantly higher raw material costs. Our strong figures show once again that we have chosen the right strategy of sharpening our customer focus, increasing our cyclical resilience and concentrating on growth markets,” said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE, during his presentation of the company’s latest results.
BASF confirms confident outlook for full-year 2008
Despite a slight decline, BASF’s chairman said that he was still expecting global chemical production to grow at 2.4 percent in the current year, and that he anticipated global economic growth of 2.8 percent. BASF has increased its forecast for the average price of Brent crude to $120 per barrel in 2008 and expects an average exchange rate of $1.55 per euro. In addition to extremely high and volatile raw material prices and the weak U.S. dollar, Hambrecht sees risks posed by a growing trend to stagflation and the aggravation of geopolitical tensions.
“Despite the challenging economic environment with high raw material costs, we are confident that we will achieve the goals we have set for 2008. Assuming that there are no changes to BASF’s portfolio, we aim to increase sales and to improve EBIT before special items slightly,” said Hambrecht.
BASF has also set itself long-term financial goals: In each of the next five years, the BASF Group aims to achieve an EBITDA margin of 18 percent. Even under trough conditions, the company expects to realize an EBITDA margin of more than 14 percent. This goal is based on the following long-term assumptions: an unchanged portfolio, an oil price (Brent) of $100 per barrel and an exchange rate of $1.40 to $1.50 per euro. In the same period, BASF aims to post average volume growth two percentage points above the relevant chemical market.
