BASF Q1 profit nearly triples

The economic recovery and a push by customers to restock their own inventories helped German chemical company BASF SE nearly triple its first-quarter net profit.

 

The company, based in Ludwigshafen and whose interests include plastics, chemicals, oil and gas and agriculture, announced a net profit of EURR1.03 billion (US$1.4 billion) for the January-March period compared with EUR375 million (US$497 million) a year earlier.

 

Revenue rose 26.5% to EUR15.4 billion (US$20.4 billion) compared with EUR12.2 billion (US$16.2) a year ago, a gain the company attributed to greater demand for its chemical products by key customers.

 

The gains were evident in demand from automakers and electronics makers who have sought to restock their supplies of plastics and chemicals amid an upswing in the sales of their own products.

 

Chief executive Juergen Hambrecht said the company was back to levels last seen before the global economic crisis, particularly in the performance of its chemicals and plastics units.

 

"Regionally, we saw high demand in Asia and South America. North America is also slowly recovering. Europe is bringing up the rear," he said.

 

Looking ahead through 2010, Hambrecht said even though the recovery remains shaky, the company hopes to build on its results.

 

Still, he warned that volatility in the raw materials markets, concern about the debt crisis in Europe and excess capacity could make things tricky. He also said that the economic recovery could become more uneven through the year.

 

BASF said that planned shutdowns of plants for maintenance would weigh on second-quarter results.

 

That said, Hambrecht was optimistic about sales in the coming year. "We expect our sales to grow again in 2010 and outpace global chemical production," Hambrecht said.