Ludwigshafen. The chemical group BASF is pushing ahead with its savings program after the significant drop in sales and earnings in the second quarter. By the end of 2023, the group wants to save more than 300 million euros annually. “Together with the initiatives already running in our global service units, we will reduce fixed costs by the end of 2026, so that from then on they will be around one billion euros less every year,” said CFO Dirk Elvermann on Friday.
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Like the entire industry, BASF is feeling the effects of the sluggish demand, especially in China. There seems to be no recovery in the second half of the year. The group therefore recently cut its targets for the year as a whole.
Drop in sales in the second quarter
According to the figures recently presented, sales in the second quarter fell year-on-year by a quarter to 17.3 billion euros. The reasons for this were significantly lower prices and volumes overall. Negative currency effects also slowed things down. Earnings before interest and taxes (EBIT) and special items fell by more than half to one billion euros. The profit collapsed from a good two billion euros in the previous year to 499 million euros.
For the current year, BASF calculates a drop in sales to 73 billion to 76 billion euros, after 87.3 billion euros in the previous year. The forecast was previously significantly higher at EUR 84 billion to EUR 87 billion. In terms of the operating result (adjusted EBIT), the management only expects 4.0 billion to 4.4 billion euros, instead of a decline from almost 6.9 billion in the previous year to 4.8 billion to 5.4 billion euros.