BASF Profit Climbs on Chemicals Demand
BASF AG, one of the world's biggest chemical companies, said Wednesday that its second-quarter profit rose 11.3 percent as demand and higher prices for its products boosted global sales.
The Ludwigshafen-based company earned 1.02 billion euros ($1.4 billion) in the April-June period compared with 920 million euros a year earlier and beating the 977 million euros ($1.3 billion) forecast by analysts polled by Dow Jones Newswires.
Sales were up 18.9 percent to 14.66 billion euros ($20.09 billion) from 12.32 billion euros a year ago, propelled in part by a 50 percent increase in BASF's chemicals unit, the company said.
Shares of BASF were down more than 2.4 percent to 92.95 euros ($127.41), part of a wider drop on Germany's DAX-30 Index.
BASF said that unit's second-quarter sales rose to 3.66 billion euros ($5.02 billion) from 2.44 billion euros in 2006. That figure was helped by its deals last year to acquire Degussa GmbH's construction chemicals unit and Johnson Polymers, which were not included in the 2006 results. It also bought catalytic converter maker Engelhard Corp. of the United States.
Looking ahead, BASF said it expects demand for chemicals to continue unabated, with full-year sales expected to be higher than 2006.
Its oil and gas operations, including BASF Wintershall, were hurt by the weaker dollar and lower oil prices, causing sales to dip 9 percent to 2.27 billion euros ($3.11 billion) in the quarter.
Looking ahead, BASF raised its assumption for the average price of Brent crude in 2007 to $65 per barrel, from its previous forecast of $55 per barrel.
For the rest of the year, Chief Executive Juergen Hambrecht said BASF was poised to meet and exceed last year's pretax profit of 7.3 billion euros and sales of 52.6 billion euros.