October 30, 2007

 

Agriculture strongest growth segment for BASF in Q3

 

Press release

 

 

BASF increased its sales and earnings in the third quarter of 2007 and is thus heading for a record year again.

 

BASF's Chief Financial Officer Dr. Kurt Bock pointed out to analysts and journalists that all segments contributed to the increase in sales. In particular, the businesses acquired last year performed strongly.

 

BASF was able once again to increase volumes in comparison to the very strong quarter in the previous year, and slightly raise sales prices.

 

Overall, BASF increased sales by 5 percent to nearly EUR 14 billion (US$20.19 billion)  in the third quarter of 2007. Income from operations (EBIT) before special items rose by 6 percent to EUR 1.7 billion (US$2.45 billion).

 

Cumulative sales in the first nine months of 2007 rose by 13 percent to EUR 43.3 (US$62.44 billion). EBIT before special items increased by 9 percent to EUR 5.9 billion (US$8.5 billion).

 

Earnings per share more than doubled in the third quarter due to higher income from operations as well as a lower tax rate as part of the German Corporate Tax Reform 2008. This has resulted in non-recurring, non-cash income being included in the third quarter due to the revaluation of deferred taxes.

 

Although all segments saw increased sales in the third quarter, the Agricultural Products and Nutrition segment posted the strongest sales growth of all segments in percentage terms, up 7 percent. Both divisions within the segment improved earnings. In Agricultural Products, higher sales prices were realized, in particular for fungicides for soybean cultivation in South America; also volumes were significantly increased. Restructuring measures in Fine Chemicals have been clearly successful. In addition, higher sales prices for several vitamins contributed to the significant earnings increase.

 

Positive outlook for full-year 2007

 

BASF is now expecting for 2007 the following conditions:

 

− Global economic growth of 3.5 percent

 

− An average oil price (Brent) of around $70/barrel

 

− An average dollar/euro exchange rate of $1.35 per euro

 

BASF is continuing with its restructuring measures and cost reduction programs in order to expand its position in the competitive environment.

 

For the year 2007, BASF expects sales of close to EUR 58 billion. Also in the fourth quarter, scheduled plant turnarounds, in particular in Petrochemicals, are set to reduce earnings.

 

Nevertheless, BASF expects EBIT before special items in 2007 to exceed the previous year's record level.