BASF earnings disappoint in 2023

FRANKFURT

Germany's beleaguered chemicals giant BASF reported worse-than-expected 2023 earnings on Jan. 19, as cost-cutting efforts failed to compensate for a slump in sales.

The Ludwigshafen-based group booked a net profit of 225 million euros ($245 million) last year, according to preliminary figures, well below analyst forecasts of 2.25 billion euros.

Sales came in at 68.9 billion euros, a more than 20-percent drop on the year before and short of the group's targeted range of 73 to 76 billion euros.

BASF, which supplies chemicals for the automobile, agriculture and construction sectors, said the disappointing performance was "due to sales-related lower margins, which could not be offset by the achieved fixed cost reduction.”

Earnings were also hurt by impairments totaling 1.1 billion euros that mainly affected the surface technologies, agricultural solutions and materials segments, BASF added.

Like other companies in energy-intensive sectors, BASF has been hit hard by surging energy costs in the wake of Russia's invasion of Ukraine in 2022.

An industrial slowdown in Germany, Europe's biggest economy, and weaker foreign demand have added to the group's woes.

BASF announced in October that it would step up a major cost-cutting drive, particularly in Europe, and reduce investments over the coming years in an attempt to improve profitability.

New CEO Markus Kamieth will take over from Martin Brudermueller in April.