Massive write-downs: BASF is in the red

The corona pandemic hits chemical giant BASF. As a result, the group has to write off billions and write them off for restructuring. However, day-to-day business is going better than expected.

The chemical giant BASF closes the third quarter with a billion dollar loss. Depreciation as a result of the corona pandemic of 2.8 billion euros and restructuring provisions pushed the company into the red, according to preliminary figures after taxes and third-party interests, at 2.12 billion euros, as he announced. A year ago there was a profit of 911 million euros.

The operating business was meanwhile better than expected by analysts: At 581 million euros, the adjusted operating result (EBIT) was well in the profit zone and 355 million euros above the weak result of the previous quarter. Compared to the previous year, however, the EBIT was halved because basic chemicals and the materials division were under persistently high margin pressure. The Nutrition & Care, Agricultural Solutions and Industrial Solutions segments also recorded declines in earnings. Group sales fell by five percent to 13.8 billion euros due to negative exchange rate effects.

BASF expects its operating profit to improve further in the fourth quarter. Therefore, sales in the range of 57 billion to 58 billion euros and an adjusted EBIT of between 3 billion and 3.3 billion euros can be expected for 2020, it said. BASF withdrew its forecast at the end of April because of the corona crisis. In the previous year, the company had generated 59.3 billion euros and earned 4.6 billion euros operationally. On the stock exchange, the paper gave way in view of the forecast failure for the third quarter.