BASF hails earnings momentum but sees low-end annual profit

BASF SE forecasted full-year earnings to land at the lower end of its guidance, despite improved third-quarter profits.

BASF hails earnings momentum but sees low-end annual profit

The Germany-based chemical giant reported a Q3 2024 net income of €287 million, a shift from a €249 million loss a year ago. Earnings before interest, tax, depreciation, and amortization (EBITDA) before special items rose 5% to €1.62 billion, while EBITDA, including €385 million in special items, fell 6.3% to €1.28 billion. Earnings per share (EPS) reached €0.32, compared to a loss of €0.28 per share last year, with adjusted EPS unchanged at €0.32. Chair Markus Karneith attributed earnings growth in core businesses to higher volumes and margins, though it was partly offset by declines in standalone segments. Under its new strategy, BASF now distinguishes between core businesses (Chemicals, Materials, Industrial Solutions, Nutrition & Care) and standalone businesses (Environmental Catalyst and Metal Solutions, Battery Materials, Coatings, and Agricultural Solutions). Quarterly sales remained stable at €15.74 billion, with volume growth in core segments and Agricultural Solutions, though Surface Technologies saw declines due to weak automotive demand. Currency impacts from the Argentine peso and Brazilian real weighed on sales.

Positive outlook

BASF kept its 2024 EBITDA guidance between €8.0 billion and €8.6 billion, expecting to reach the low end. In 2023, EBITDA before special items was €7.7 billion. Free cash flow is projected between €0.1 billion and €0.6 billion. For Q4, BASF noted potential risks from price declines and lower volume growth but saw possible upsides in demand and margins. The company remains on track to achieve its €2.1 billion annual cost savings target by the end of 2026.