Due to the high dependence on China, numerous analysts had already expected that BASF would have to lower its forecasts. “Yes, the profit warning was expected, but it’s stronger than expected and market participants are now questioning the dividend,” a trader told Reuters. The analysts at the US bank JPMorgan were also surprised by the extent, but also saw reason for optimism: “Against the background of the massive reduction in inventories in the chemical value chain that has already taken place, we believe it is likely that profits in the coming quarters will recover very significantly and better than expected”.
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In the second quarter, BASF’s sales shrank by a quarter to 17.3 billion euros due to significantly lower prices and volumes, almost two billion euros below analyst estimates. According to preliminary figures, adjusted operating profit fell to one billion euros. Negative currency effects also slowed things down. BASF will present the full half-year report on July 28.