BASF sees 2012 earns slip, but still raises dividend

Tuesday 26 February 2013 18.47
BASF net profits down 21% in 2012
BASF net profits down 21% in 2012

Higher raw materials costs and slow demand at BASF's basic chemicals business combined to push the company's earnings in 2012 lower.

Booming sales at the company's oil and gas division were also blunted by higher taxes and a one-time charge, BASF said today.

Overall, net profit fell 21% to €4.89 billion despite a 7% rise in sales to €78.7 billion.

Still, BASF said profits would rise this year and raised its dividend by 10 cents to €2.60 a share.

A breakdown of the figures showed that earnings at the chemicals division fell 30% on higher raw materials costs and following a slow year for the entire industry.

The division makes substance that serve as the starting material for a wide range of products, including detergents, plastics, textiles, paint, and pharmaceuticals.

The company's division which makes more complex substances for use in things like vitamins and food additives also saw earnings fall.

The oil and gas division and its farm products business both saw strong jumps in sales.

Oil and gas sales jumped 39% after the restart of the company's operations in Libya following the civil war there.

Higher taxes led to a profit increase of only 13%, and there was a €120m charge related to the company's stake in the troubled Yme offshore gas platform off the coast of Norway.

The platform had to be evacuated last year due to cracks in its concrete foundation.

The comparison with 2011 figures was skewed by a gain that year from the sale of shares in fertilizer company K+S.

The company said that fourth quarter profit fell 13% to €980m on sales that rose 8.7% to €19.6 billion.

Keywords: basf, chemicals