Global demand fuels results by German chemical groups
German chemical groups posted strong solid quarterly results Thursday as a global economic rebound and a drop in the euro's value pulled them out of slumps suffered last year.
Earnings at BASF were a clear sign that expanding activity in several parts of the world and the euro's fall against the dollar had boosted a crucial sector of Europe's biggest economy.
The world's biggest chemical group posted results that were better than expected, with net profit leaping to 1.18 billion euros (1.53 billion dollars) from 343 million in the same period a year earlier, a statement said.
Analysts polled by Dow Jones Newswires had expected a more modest, though still strong, increase to 988 million euros.
The group's core chemical and plastic activities rebounded sharply, while earnings from agriculture-related products were weaker, with overall sales up by 29.7 percent at 16.2 billion euros.
"These developments were especially due to very high demand in the chemicals businesses," a BASF statement said before adding: "This was augmented by inventory restocking along the value chain."
The International Monetary Fund forecasts global economic growth this year of 4.2 percent, led by Asia and emerging powerhouses Brazil and India.
Meanwhile, a smaller German chemical group, Merck KGaA, said its operating profit soared by 76 percent to 325 million euros in the quarter, while net profit gained 69 percent to 183 million.
The strongest gains were posted by Merck's chemical division and one that makes liquid crystals for television screens.
Merck raised its full-year forecast for operating profit to an ambitious gain of 90 percent from the previous outlook of 30-40 percent, and said sales should climb by 21 percent.
"The pleasing results of the second quarter, with total revenues well over two billion euros, show that our excellent first quarter was setting the course for the year," chairman Karl-Ludwig Kley was quoted as saying.
Elsewhere in Germany, Bayer said group sales had increased by 14.6 percent to 9.1 billion euros, owing to a rebound by its chemical division, which offset weaker results from the group's pharmaceutical and agro-chemical units.
Bayer's MaterialScience division posted sales of 2.689 billion euros, up from 1.83 billion in the second quarter of 2009.
"This very gratifying improvement was due especially to the considerable increase in demand in our primary customer industries," chairman Werner Wenning explained.
Prices for polyurethane-related products increased in the Asia-Pacific region and in Europe, a statement said, though they declined in North and Latin America.
"Business with raw materials for coatings, adhesives and specialties also trended successfully," Bayer said.
Shares in the three groups advanced in morning trading on the Frankfurt stock exchange, with Merck leading the market higher with a leap of 5.70 percent to 67.86 euros.
Bayer shares advanced by 1.37 percent to 44.80 euros, while those in BASF were just 0.23 percent stronger at 45.44 euros.
The DAX index of German blue-chips was 0.51 percent higher overall.
© 2010 AFP