Food, agriculture products from BASF underpin first-quarter earnings beat
FRANKFURT (Business) – Demand for BASF’s farm supplies and ingredients for food, cleaning products and drugs helped the German chemicals giant cushion the downturn from the coronavirus pandemic and beat market expectations for quarterly operating profit.
BASF said on Thursday that demand for basic petrochemicals and plastic used in car parts was dragged lower by global lockdown measures, causing adjusted group earnings before interest and taxes to slip 6% to 1.6 billion euros (1.39 billion pounds).
But that surpassed average analysts’ projections of 1.47 billion, according to a consensus posted on the group’s website.
“BASF’s diversified portfolio offers advantages, especially in difficult times,” Chief Executive Martin Brudermueller said in a statement.
Late on Wednesday, the company withdrew its outlook for 2020, saying it was impossible to estimate the duration and severity of the coronavirus pandemic. But management stood by an earlier proposal to pay a dividend of 3.30 euros per share for 2019.
The company on Thursday described the transportation and automotive sector as the most heavily affected by the pandemic among BASF’s customer industries.
“This decline in demand from our most important customer industry is currently hitting us hardest,” said Brudermueller.
(Photos syndicated via Reuters)