FRANKFURT (AFP) – BASF’s chief executive said that elevated energy costs would force chemicals companies in Europe to rein in production, as the German group reported financial results below expectations.
Speaking to reporters, Markus Kamieth said energy-intensive chemicals companies would have to change where and how they did business to stay profitable.
“We’re assuming the value chains will continue to change, particularly in Europe,” he said, adding that change did not mean “the end of the chemicals industry in Europe”.
“There are just some products that, for the foreseeable future, simply cannot be made in Europe at a competitive price,” he added, pointing to gas-intensive ammonia manufacturing as an example.
“In the future, we in Europe will import ammonia from regions where gas is much cheaper.”
Earlier, the group reported a net profit of EUR1.3 billion (USD1.4 billion) for 2024, a six-fold increase on the previous year that nonetheless just missed analyst expectations.
The figure was boosted by a better performance at firms in which BASF has part ownership as well as asset sales.
The group’s operating profit (EBITDA before special items), a closely watched measure of underlying performance, came in at EUR7.9 billion for the year, broadly in line with the analyst predictions compiled by BASF.
Sales were down to EUR65.3 billion from EUR68.9 billion – even as sales volumes rose – with BASF blaming the fall on “competition-driven price decreases”, underscoring the fierce competition the German group faces.
The firm also flagged “weak momentum in the automotive industry”, where European carmakers have been losing market share to Chinese producers, as a factor in its stuttering sales.
For 2025, BASF said it expected operating profit to rise above EUR8 billion, though it said “increasing geopolitical uncertainty and a further escalation of trade conflicts” could make business tricky.
United States (US) President Donald Trump has repeatedly threatened to impose tariffs on trading partners, which could weigh on industrial activity, and has already imposed duties on steel, aluminium and all imports from China.
BASF’s finance chief Dirk Elvermann said that the group currently expects tariffs to cost it about EUR100 million, with production sites in the US helping to limit some of the damage.
The group’s share price fell at opening on the Frankfurt Stock Exchange, before recovering during the day to be up 1.3 per cent at around 1600GMT, shortly before the close of trading.
