Texas troubles weigh on chemicals firm BASF in Q3
FRANKFURT, Germany (AP) — BASF SE saw third-quarter profits fall 21 percent as its chemicals business suffered from lower demand, as well as from troubles at a key Texas facility.
However, stronger oil sales helped soften the blow, now that the company's facilities in Libya are working again after being shut down last year during the civil war.
The company said Thursday that net profit fell to €946 million ($1.23 billion) from €1.19 billion in the same quarter a year ago. Sales rose 8 percent to €19.0 billion.
Its chemicals division faced lower prices for its products in a slowing global economy, meaning less profit despite increasing sales. It also had to deal with unexpected shutdowns for technical reasons at the division's steam cracker in Port Arthur, Texas, a facility that makes products derived from oil.
The company's chemicals division saw operating earnings fall 25 percent to €633 million. Sales rose, but profits fell due to a 9 percent decline in prices. In its petrochemicals division the company saw "lower margins across almost all product lines." It foresaw no pickup in the fourth quarter, either.
BASF, based in Ludwigshafen, Germany, maintained its profit outlook for the rest of the year but cut its prediction for global growth. BASF has a good view of the global economy since it sells chemicals and plastics that are raw materials for a wide range of industries, including cars, construction, textiles, and electronics.
The company says the world economy will grow 2.2 percent this year instead of its earlier forecast of 2.3 percent and that industrial production will grow 2.8 percent instead of 3.4 percent.
"In the past quarter, the outlook for the world economy has once again not improved and the uncertainty on the international capital markets continues," CEO Kurt Bock said.
Bock said growth slowed in the quarter in China, a key driver of the global economy, and that the company sees "stabilization at the current level in China, but no visible upturn."