CAPTION: German chemical company BASF earns significantly less in Q3. (icture alliance/dpa)
German chemical company BASF earned significantly less in the third quarter than in the previous year due to write-offs.Profit after tax is expected to have fallen from €1.25 billion in the previous year to €909 million (from $1.21 billion to $881 million), BASF announced when presenting preliminary figures from its headquarters in the south-western city of Ludwigshafen.
The result included non-cash write-downs on the majority stake in the gas and oil company Wintershall Dea amounting to around €740 million, it said. These resulted from the partial write-off of the stake held by Wintershall Dea in Nord Stream AG, which operates the Nord Stream 1 pipeline.
The turnover of the Dax group increased by 12% year-on-year to just under €22 billion in the third quarter thanks to higher prices and favourable exchange rates.
The operating result - earnings before interest, taxes and special items - fell by almost 28% to €1.35 billion but was better than analysts had previously estimated.
Higher prices for raw materials and energy could still be partially passed on through higher sales prices, the company said. BASF confirmed its annual targets and continues to expect an operating profit of between €6.8 billion and €7.2 billion.
Due to the significant weakening of earnings in Europe - especially in Germany - and the deteriorating business environment in the region, BASF is launching a cost-cutting programme with a focus on Europe and especially Germany.
It is to be implemented from 2023 to 2024. With this, the company wants to save costs of €500 million a year outside of production. More than half of the savings are to be realized at the Ludwigshafen site.
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