German chemical industry giant BASF SE’s earnings declined slightly in the second quarter after prices fell across its chemicals business.
EFITDA fell 3.7%, to €969 million ($1.1 billion), BASF reported on July 26, adding that gains in its industrials solutions unit were dragged down by lower prices for ammonia-based products. The result slightly missed analyst forecasts. Shares traded down 2.4% at 10:47 a.m. in Frankfurt, bringing the stock’s losses this year to 11%. BASF left its outlook unchanged.
BASF in February deepened savings measures at its main site in Ludwigshafen to trim €1 billion from annual costs by 2026. Those and other efficiency measures that the company announced in late 2023 (GM Nov. 3, 2023) are going ahead as planned, BASF said. The company also plans to shut down two smaller sites in Germany and is reviewing investment plans for battery materials as growth of electric-vehicle sales stalls (GM Dec. 22, 2023).
“Results were mostly in line with our expectations,” Citi Analyst Sebastian Satz said in a note, adding that volume growth was strong in the chemicals and industrial solutions units while “surprisingly weak” in the materials and agricultural divisions.
In June, BASF abandoned plans for a $2.6 billion nickel-cobalt refinery joint-venture in Indonesia. It is considering layoffs at its Finnish battery materials plant, and stepped back from plans to invest in lithium mining assets in Chile. On July 26, it also said it will pause plans for a battery recycling site in Spain.