BASF Can't Rule out Adjusted EBIT Loss in 2Q Due to Pandemic -- Update
30 April 2020 - 12:16PM
Dow Jones News
--BASF forecasts significant hit to 2Q earnings and expects slow
recovery in second half of the year
--Net profit for 1Q missed expectations, but sales and EBIT
before special items beat consensus estimates
--Wintershall DEA IPO won't take place in current
environment
By Kim Richters
BASF SE expects second-quarter earnings to decrease
significantly and can't rule out a potential loss, it said Thursday
after pulling its full-year guidance overnight due to the
coronavirus pandemic.
The German chemical company expects earnings before interest,
taxes and special items in the range of a low three-digit million
euros at best in the second quarter, Chief Executive Martin
Brudermueller said in a telephone conference.
It could also drop below zero, he said, adding that this would
be the "worst case scenario."
The company is facing decline in demand from customers like the
automotive industry, which is experiencing production shutdowns and
supply-chain disruptions amid the pandemic.
BASF, which pulled its guidance for 2020 late Wednesday ahead of
quarterly earnings, forecasts a significant decline in sales volume
in the second quarter and a slow recovery in the second half of the
year as a result of the pandemic.
As for the first quarter, net profit fell to 885 million euros
($960.9 million) from EUR1.41 billion a year earlier, missing
analysts' expectations of EUR920 million.
Quarterly earnings before interest and taxes fell 18% to EUR1.46
billion, and EBIT before special items declined 6% to EUR1.64
billion. Analysts had expected BASF to post EBIT before special
items of EUR1.47 billion.
Sales rose 7% to EUR16.75 billion, BASF said, beating consensus
estimates of EUR14.98 billion.
The company expected to list oil-and-gas spinoff Wintershall DEA
on the stock market this year but now said that an initial public
offering wouldn't take place in the current environment.
BASF doesn't intend to apply for emergency state aid to cope
with the pandemic, its management said in the conference. It has
applied for employee short-time work, however, with a total of
6,700 employees across Europe participating so far.
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
April 30, 2020 06:01 ET (10:01 GMT)
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