BASF Maintains Financial Strength Despite Coronavirus Crisis

BASF Group's sales in the first quarter of 2020 rose 7 percent compared to the previous quarter, reaching €16.8 billion. This is largely attributable to a 4 percent increase in volumes. Operating profit before special items (EBIT before special items) declined 6 percent compared to the first quarter of 2019, reaching €1.6 billion. The decline in EBIT before special items was primarily due to significant decreases in the Chemicals and Materials segments and elsewhere. BASF SE Chief Executive Officer Dr. Martin Brudermüller said, "The first quarter of 2020 was not a normal quarter. The same applies to the second quarter and probably the entire year. Coronavirus has turned the world upside down. Due to the very challenging macroeconomic environment, there was great uncertainty in the markets, which has made reliable planning nearly impossible at present. For this reason, concrete statements regarding the development of sales and earnings in 2020 cannot be made at this time."

Advantages of BASF Group's diversified portfolio

Not all of our customers in our sectors are equally affected by the pandemic. They are showing varying degrees of resilience in this environment. For example, pharmaceuticals, detergents and cleaners, or food. Currently, we are even seeing additional demand. This is clearly evident at BASF in incoming orders in the nutrition and care segment. Demand in the agricultural industry is also unaffected. However, other industries are experiencing the consequences of the pandemic intensively. There are also production shutdowns and supply chain disruptions. Declines are currently being seen in the transportation and automotive sectors. This decline in demand in a significant portion of the sector is currently affecting us as well. The annual margins of the ethylene and propylene value chain, as well as isocyanates and polyamide precursors, had a significantly negative impact on earnings in these segments. Additionally, fixed costs were higher. The increase in earnings growth in the performance materials division can only partially offset the decline in the monomers division. Source