BCN-27 BASF confirms weaker 2018 forecast after profits dive

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GERMANY-CHEMICALS-EARNINGS-BASF

BASF confirms weaker 2018 forecast after profits dive

FRANKFURT AM MAIN, Oct 26, 2018 (BSS/AFP) – German chemicals giant BASF
confirmed a full-year outlook for weaker profits Friday after a slowdown in
the third quarter, adding that one-off factors weighed especially strongly on
its bottom line.

Net profit at the Ludwigshafen-based group fell 10 percent year-on-year,
to 1.2 billion euros ($1.36 billion), in line with forecasts from analysts
surveyed by Factset.

Operating, or underlying profit before special items, fell 14 percent to
1.47 billion euros, although revenues were eight percent higher at 15.6
billion as BASF raised prices and sales volumes.

Chief executive Martin Brudermueller pointed to an unfavourable comparison
with last year’s “very strong” third quarter as one reason for the profits
slump, as well as negative currency effects.

Other factors also weighed on BASF, such as the low level of the Rhine
after a hot, dry summer in Germany, which Brudermueller said “led to
production cutbacks and higher transportation costs” at the firm’s riverside
HQ.

Costs also came due for integrating 7.6 billion euros of seeds and
pesticides businesses, which rival Bayer was forced to sell to earn
competition authorities’ green light for its takeover of US-based Monsanto.

The third quarter also brought a merger of BASF’s oil and gas subsidiary
Wintershall with Russian-owned DEA.

BASF reaffirmed its cautious full-year forecast, which it had already
lowered in September following the DEA deal.

The group said it expects “slight sales growth” for 2018 compared with the
previous year and a “slight decrease” in operating profit before special
items.

BSS/AFP/HR/1222