Friday, February 23, 2024
29 C
Brunei Town

BASF slides into quarterly loss on lower prices

FRANKFURT (AFP) – German chemicals giant BASF reported a third-quarter loss yesterday on the back of lower prices across key divisions, and warned of a gloomier outlook as high energy costs weigh on the industry.

From July to September, the group booked a net loss of EUR249 million (USD265 million), compared with a profit of EUR909 million a year earlier.

The decline was driven by losses at the Wintershall Dea energy unit due to special items, as well as “considerably lower prices” in the materials, chemicals and surface technologies segments and lower volumes overall.

“Sales volumes were considerably lower than in the prior-year quarter across all customer industries – with the exception of automotive,” Chief Executive Officer Martin Brudermueller said in a statement. Group revenues fell by 28 per cent to EUR15.7 billion, while earnings before profits also plunged.

Like other companies in energy-intensive industries, BASF – which supplies chemicals for the automobile, agriculture and construction sectors – has been hit hard by surging energy prices following the war Ukraine in 2022.

The group said it would ramp up a major cost-cutting drive launched in February and now expected to achieve savings of EUR1.1 billion annually by the end of 2026.

The plan, aimed at boosting BASF’s competitiveness in Europe especially, includes 2,600 job cuts and reduced production at the group’s historic Ludwigshafen site.

File photo of a BASF plant in Germany. PHOTO: AFP