Chemical giant BASF's second-quarter net income fell 4.2% and the company said worldwide economic growth and demand for chemicals aren't expected to accelerate in the second half of 2013.
“The economic environment is and remains volatile," said Kurt Bock, chairman of the board of executive directors of BASF SE. "The European economy is shrinking slightly; the Chinese growth engine is no longer running at full power; the United States is growing moderately. We are clearly feeling these effects and are doing everything we can to maneuver BASF successfully through this challenging environment. ”
Despite this, Bock added that BASF for 2013 still aims to exceed its 2012 levels in sales and Earnings Before Interest and Taxes (EBIT) before special items.
During the second quarter, the company's net income slipped to €1.16 billion from €1.20 billion a year earlier. However, sales rose by 3% in the second quarter of 2013 to just under €18.4 billion due to higher sales volumes in all segments.
In its chemicals segment, second-quarter sales decreased by 4% in a weak environment. Sales prices declined due to lower raw material costs. Sales volumes rose slightly. Compared with the second quarter of 2012, EBIT before special items declined by €106 million to €495 million. This was mainly the result of weaker margins for caprolactam and polyamides.
The company, which also provides its economic forecast for 2013, expects gross domestic product growth of 2.0%, as compared to its prior forecast of 2.4%; growth in industrial production of 2.7%, as compared to its prior forecast of 3.4%; growth in chemical production of 3.1%, as compared to its prior forecast of 3.6%; an average euro/dollar exchange rate of $1.30 per euro, unchanged; and an average oil price for the year 2013 of $105 per barrel, as compared to $110 per barrel.