Germany's BASF, the world's largest chemicals group by sales, forecast a rebound in earnings this year after higher petrochemical prices boosted profits in the final three months of 2016.
The company's products include catalytic converters for car engine exhausts, insulation foams, vitamins and plastics.
It said today it was targeting a gain in operating profit before one-offs of up to 10% in 2017 after a 6% decline last year.
Higher crude prices are expected to bolster its oil and gas division and its large petrochemical complexes, which have benefited from above-average investments over previous years, will have better utilisation rates, BASF said.
But investors had hoped for an increase in operating profit of more than 12% in 2017.
BASF said its fourth-quarter operating profit (EBIT) adjusted for one-off items rose a better than expected 15% to €1.18 billion, slightly above the €1.12 billion expected by analysts polled by Reuters.
Strong demand for basic precursor chemicals that go into more advanced products such as engineering foams enabled the company to increase prices.
"Particularly in Asia, we continually increased our sales volumes in the chemicals business," BASF's chief executive Kurt Bock said.
He added that investments made on plants, equipment and product development in the region were paying off.
The earnings gain, however, was tempered by money set aside for remuneration to senior managers, who are in for a higher bonus after BASF's shares rallied about 14% in the fourth quarter.
