BASF Group: operating result in the second quarter of 2020 above market expectations

Net income below market expectations due to impairment of shareholding in Wintershall Dea, mainly from oil and gas prices.

  • EBIT before special items expected to be €226 million (Q2 2019: EUR 995 million)
  • Net income expected to be minus EUR 878 million due to a non-cash-effective impairment of the shareholding in Wintershall Dea (Q2 2019: EUR 5954 million)

BASF has released preliminary figures on business development in the second quarter of 2020. Sales declined by 12.4 percent in the second quarter of 2020 to EUR 12680 million (Q2 2019: EUR 14478 million). EBIT before special items, which reflects the development of the BASF Group’s operating business in the second quarter of 2020, amounted to an expected EUR 226 million, above market expectations and in the range indicated by BASF, but considerably below the figure for the prior-year quarter (Q2 2019: EUR 995 million). The decline in EBIT before special items is the result of significantly lower earnings in the Materials, Surface Technologies, Chemicals and Industrial Solutions segments compared with the prior-year quarter. This was mainly driven by lower demand from the automotive industry – the company’s most important customer industry. Year-on-year earnings growth in the Nutrition & Care segment and in Other had an offsetting effect. Earnings in the Agricultural Solutions segment were at the level of the prior-year quarter.

The BASF Group’s EBIT in the second quarter of 2020 amounted to an expected EUR 59 million, considerably below the figure for the prior-year quarter (Q2 2019: EUR 507 million).

The BASF Group’s net income is expected to amount to minus EUR 878 million due to a non-cash-effective impairment of the shareholding in Wintershall Dea, considerably below current analyst estimates and the figure for the prior-year quarter (Q2 2019: EUR 5954 million). The impairment of around EUR 800 million is the result of lower oil and gas price forecasts and changed reserve estimates. In the prior-year quarter, net income included a book gain of EUR 5684 million on the deconsolidation of Wintershall following the merger of Wintershall and DEA as of May 1, 2019.

An overview of analyst estimates, which is compiled monthly on behalf of BASF, can be found at: www.basf.com/analysts-estimates

www.basf.com