Business at the chemical company BASF is worse than previously expected. On Wednesday evening, the Dax group received its original forecast for the current financial year. He now expects sales of between 73 and 76 billion euros, significantly less than previously forecast at 84 to 87 billion euros. In 2022, BASF had generated sales of 87 billion euros. The result also suffers. For 2023, the company is now expecting earnings before interest, taxes and special items of between four and 4.4 billion euros, which is also significantly less than the previous forecast of 4.8 to 5.4 billion euros. EBIT before special items will therefore also be well below the previous year’s figure of just under 6.9 billion euros.
The growth in global industrial production slowed down in the first half of 2023, as a result of which global chemical production fell “noticeably”. The group does not expect demand to weaken further in the second half of the year. Customer stocks of chemical raw materials have already been greatly reduced. However, BASF is assuming only a “tentative recovery” since global demand for consumer goods will be weaker than previously assumed. “This will also keep the margins under pressure,” it says.
The group also presented preliminary figures for the second quarter of 2023. After that, sales are expected to drop by a quarter to 17.3 billion euros. The decisive factors were “significantly lower prices and quantities” and negative currency effects. At a good one billion euros, earnings before interest, taxes and special items in the second quarter of 2023 were more than half below the figure for the same period of the previous year of 2.3 billion euros. The profit collapsed to an estimated half a billion euros, compared to a good two billion euros in the same quarter of the previous year.
The Ifo Institute reported last week that the business climate in the chemical industry had clouded over significantly in June. It fell to minus 28.3 points from minus 12.5 in May. According to the results of the survey, business expectations in particular have continued to deteriorate; they fell from minus 5.5 points in May to minus 25.6 points in June. “It’s not just the high energy and production costs that are putting a strain on chemical businesses. The order situation for many companies has also continued to deteriorate because global demand for chemical products is still weak,” the Ifo Institute quoted in its statement his industry expert Anna Wolf.