FRANKFURT, July 28 — German chemicals giant BASF today reported a heavy fall in profits in the second quarter as it was hit by weak demand and high energy costs.
From April to June, net profits came in at €499 million (RM2.4 billion), a fall of 76 per cent on the same period a year earlier.
“We faced low demand from our key customer industries, except for automotive,” said CEO Martin Brudermueller.
Sales in the quarter declined by 24.7 per cent to €17.3 billion, while operating profit before special items also plunged, BASF said.
As well as weak demand, BASF, which supplies chemicals for the automobile, agriculture and construction sectors, has been hit hard by surging energy prices after Russia invaded Ukraine last year.
While gas prices have fallen since peaking in August last year, they still remain far higher than before the invasion.
The company had already lowered its forecast for the year earlier in July, saying it expected sales for 2023 of between 73 and 76 billion euros, down from a previous outlook of between €84 and €87 billion.
In February, BASF had announced that it was slashing 3,300 jobs, with the closure of several units at its historic site in the western city of Ludwigshafen.
Brudermueller said the company did not expect a further weakening in demand for chemicals in the second half of the year but that any recovery would be “tentative”.
“We expect that global demand for consumer goods will grow slower than previously assumed,” he added. — AFP