BASF Starts 2023 Better Than Expected Despite Stagnating Environment

BASF Group has posted sales in the first quarter of 2023 amounting to €20 billion, down by €3.1 billion compared with the prior-year quarter, primarily because of lower volumes in almost all segments due to weaker demand. Slightly lower prices additionally dampened sales performance.

Income from operations (EBIT) before special items decreased to €1.9 billion, a decline of €887 million compared with the strong prior-year quarter, mainly due to a significant decline in earnings contributions in the chemicals and materials segments.

EBIT declined by €918 million compared with the first quarter of 2022 to €1.9 billion. Income from operations before depreciation, amortisation, and special items (EBITDA before special items) decreased by €878 million to €2.9 billion and EBITDA decreased by €898 million to €2.8 billion in the same period.

Net income of €1.6 billion was €340 million higher than in the same period of the previous year. In the prior-year quarter, impairments on the shareholding in Wintershall Dea burdened net income. Earnings per share in the first quarter of the year were €1.75, compared with €1.34 in the first quarter of 2022.

“BASF started off 2023 better than analysts had expected, and in a stagnating and difficult economic environment,” said Dr Martin Brudermueller, Chairman of the Board of Executive Directors of BASF. The BASF businesses with customers in the agricultural and automotive sectors made a substantial contribution to this.”

The company said forecasts as presented in the BASF Report 2022 continue to apply. These include sales of between €84 billion and €87 billion, EBIT before special items of between €4.8 billion and €5.4 billion, and return on capital employed of between 7.2 per cent and 8.0 per cent.

Assumptions regarding the global economic environment from the BASF Report 2022 remain unchanged. These include growth in gross domestic product of 1.6 per cent, growth in industrial production of 1.8 per cent, growth in chemical production of 2.0 per cent, average euro / US dollar exchange rate of US$1.05 per euro, and average annual oil price (Brent crude) of US$90 per barrel.

BASF said that the development of the global economy is still subject to great uncertainty, and momentum in global industrial and chemical production remains subdued.