BASF's sales and earnings were again negatively impacted by the ongoing global economic crisis in the second quarter of 2009, but the company's agricultural products business posted higher sales and earnings.

 

The effects on business were especially pronounced in the segments Chemicals, Plastics and Functional Solutions. Agricultural Solutions made a major contribution to earnings.

 

After a lightning start in terms of sales and earnings in the first quarter, second-quarter sales in the Agricultural Solutions segment were only slightly higher than in the same period of 2008. This was the result of delayed planting in North America and parts of Europe, as well as the drought in Argentina. EBIT before special items rose by one percent, mainly due to higher prices in North America and Europe, as well as positive currency effects.

 

Second-quarter sales dropped 23 percent to EUR12.5 billion. Lower volumes and prices contributed 18 percent and 13 percent, respectively, to the sales decline. Currency effects were positive and contributed three percent to sales. The Ciba businesses, which were acquired on April 9, boosted sales by five percent. EBIT before special items fell 53 percent to EUR1.1 billion. However, both sales and EBIT before special items improved compared with the first quarter.

 

The downturn seems to have bottomed out and there seems to be stabilisation at a low level, but there are no signs of a sustained upturn and still existing are the danger of another painful setback due to overcapacities, bankruptcies and growing unemployment, said Chief Financial Officer Dr. Kurt Bock.

 

In Europe, sales fell by 26 percent in the second quarter. Sales in North America decreased by 33 percent in dollar terms and by 24 percent in euro terms. In a difficult business environment, almost all segments were affected by the significant sales decline. At EUR184 million, EBIT before special items, however, was at the same level as in the second quarter of 2008. This was due above all to strong business in Agricultural Solutions.

 

In Asia Pacific, sales decreased by 23 percent in local currency terms and by 15 percent in euro terms.

 

Sales in South America, Africa, Middle East decreased by 10 percent in local currency terms and by 8 percent in euro terms. Business in Agricultural Solutions was negatively impacted by the drought in Argentina.

 

In view of the economic environment and the expenses resulting from the Ciba integration, BASF expects a significant decline in sales and earnings in 2009.

 

BASF is the world's leading chemical company, and its portfolio ranges from chemicals, plastics and performance products to agricultural products, fine chemicals as well as oil and gas.

 

US$1 = EUR0.710380 (Jul 30)