CAPTION: German chemical company BASF expects to post 2022 loss. (picture alliance/dpa/Uwe Anspach)
German chemical giant BASF said that it expects to report a loss for the fiscal year, compared to last year's profit.
The loss is expected due to non-cash-effective impairments on the shareholding in the gas and oil company Wintershall Dea, the company said.
Annual preliminary operating profit, or EBIT, before special items are at the level of average analyst estimates. But EBIT, a key earnings metric, is below analyst consensus due to non-cash-effective impairment.
BASF Group expects net loss to be €1.38 billion ($1.49 billion) in 2022, compared to net income of €5.52 billion in 2021.
It is considerably below the average analyst estimates of €4.77 billion.
The 2022 result included non-cash-effective impairments on the shareholding in Wintershall Dea in the amount of about €7.3 billion.
These impairments result in particular from the deconsolidation of the Russian exploration and production activities of Wintershall Dea due to the extensive loss of actual influence and economic expropriation.
Wintershall Dea intends to fully exit Russia in an orderly manner complying with all applicable legal obligations.
Sales for 2022 rose by 11% to €87.33 billion from the prior year and were thus in line with the €86 billion to €89 billion range forecast by BASF.
The average analyst estimates for sales 2022 of the BASF Group were €87.95 billion according to Vara.
The increase in sales was mainly driven by higher prices and positive currency effects.
Annual EBIT before special items amounted to €6.88 billion, a decrease of €890 million from the prior year.
The BASF Group's EBIT amounted to €6.55 billion in 2022, below the figure for the prior year of €7.68 billion.
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