Obviously more is possible. For the second time this year, the chemical company BASF is raising its forecast for the full year. Sales are now expected to rise to 74 to 77 billion euros in 2021, and operating profit (EBIT) before special items to seven to 7.5 billion euros. CEO Martin Brudermüller started the year very cautiously – with reference to the “unusually” large uncertainties about the further development. At the end of February, he had targeted sales of 61 to 64 billion euros for 2020 and an increase in operating profit of 4.1 to five billion. At the end of April, the forecast for sales was raised to 68 to 71 billion euros and operating profit before special items is expected to increase to five to 5.8 billion euros.
The stock responded to the latest news with a jump. The price increased by 3.5 percent to around 68 euros. At the end of the week, the paper performed better than the market as a whole.
Between the lower end of the first and the upper end of the forecast published on Friday are 16 billion euros in sales. The size of the jumps from prognosis to prognosis and their large bandwidths show how great the uncertainties were. And they are not completely gone either. As always, the chemical company now assumes in its forecast that measures to combat the Covid-19 pandemic will not lead to “severe restrictions on economic activity in the second half of 2021,” the press release said. The pandemic had a heavy burden on the Ludwigshafen-based group in 2020. He had to make huge write-downs on his fixed assets and make provisions for restructuring.
The latest figures from BASF also show that customers are doing better again. The chemical industry is regarded as an early indicator for the overall economic development because the corporations supply preliminary products for many other industries: paints for cars, cathode material for batteries, chemicals for PET bottles or plasticizers for cables and foils.
As can be seen from the report with the preliminary figures, sales rose compared to the same period last year by 55.8 percent to 19.8 billion euros. The increase is also so large because the slump in the second quarter of 2020 was so significant and the base value was low. BASF cites the year-on-year rise in prices by 35 percent and the 28 percent higher volumes as decisive for the growth. Currency effects, on the other hand, had a negative impact. The operating profit before special items was expected to be 2.4 billion euros, many times higher than the previous year’s figure of 0.2 billion euros.