August 3, 2006

BASF reports strong sales growth for second quarter

BASF reported strong sales growth for the second quarter, with new growth opportunities from acquisitions.

Sales for the second quarter were up 16 percent while income from operations (EBIT) before special items was up 15.3 percent from EUR 1.66 billion to EUR 1.91 billion.                          
 
Sales for the first half of this year increased 20 percent to EUR 24.8 billion from 20.6 billion compared to the same period last year while net income increased 14 percent from EUR 1.63 billion to EUR 1.87 billion.

In the Performance Products segment, all operating divisions posted higher sales due to higher volumes and a slight increase in sales prices.

Volumes and sales prices declined in the Agricultural Products & Nutrition segment. Together with the divestiture of major parts of the generics business in North America, this resulted in significantly lower sales in the Agricultural Products division.

Second-quarter earnings in the Agricultural Products division were impacted by lower volumes due to the late start to the season in Europe as well as subdued demand from customers in North America.

BASF expects its business to continue developing positively for the rest of the year. Persistently high oil prices are likely to lead to an increase in raw material costs and margin pressure and the company expects additional price increases in its products.

Major risk factors continue to be the political situation in unstable areas, especially in the Middle East, and the development of the crude oil price.

Still, the strong performance for the first half gives cause for optimism for the full year. BASF expects to post significantly higher sales and higher EBIT before special items compared with the previous year.

BASF also expects its recent acquisitions to contribute to sales in the second half, bringing total sales to more than EUR 50 billion.