BASF sees swing to multi-billion euro loss in 3Q
German chemicals giant BASF said Friday that it expects to swing to a loss in its third quarter, impacted by pandemic restrictions, and said full-year sales would be down on 2019.
The Ludwigshafen-based company said that third-quarter net loss would be 2.1 billion euros ($2.5 billion) compared with a profit of 911 million euros in the same period of 2019, as the coronavirus pandemic ravaged industries on which BASF typically relies — from aviation to car manufacturing.
It expects sales to fall by 5 percent year-on-year in the three months to the end of September, to 13.8 billion euros, from 14.5 billion euros the previous year, mainly due to currency effects such as the strengthening euro against the dollar.
The news puts further pressure on the sprawling company, which said in July it would shed 2,000 jobs by the end of 2022 that would help it save 200 million euros annually by 2023.
BASF led fallers on the blue-chip DAX index, with shares in Frankfurt at 1310 GMT down 2.3 percent, compared with a rise of 0.3 percent in the index as a whole.
The company highlighted the effect of the coronavirus on weaker demand in the automotive and aviation industries, which hit in particular its coatings, catalysts and battery materials division.
The company expects the last three months of the year to improve on the third quarter as economies adapt to coping with Covid-19.
BASF said it anticipates full-year sales of 57 billion to 58 billion euros, compared with 59.3 billion euros in 2019. In February, before the impact of coronavirus restrictions, which closed factories and businesses in the spring, BASF hoped to boost its sales to between 60 billion and 63 billion euros.
The group’s forecast “assumes that severe restrictions on economic activity to contain the coronavirus pandemic, such as lockdowns, are not re-introduced”, it said.
The company publishes its quarterly statement on October 28.