BASF’s first-quarter sales rose 4.8% marked by strong results in its agricultural solutions and oil and gas units, although the company said higher raw material costs hurt margins in its performance products unit.
The chemical giant, which together with Malaysia's Petronas Chemicals Group Bhd is investing $500 million (MYR 1.5 billion) in an integrated aroma ingredients project in Gebeng, Kuantan, said quarterly sales rose to €19.7 billion from €18.8 billion a year earlier, marked by strong results in its agricultural solutions segment.
However, net income declined 15.1% to €1.45 billion from €1.70 billion a year earlier, while income from the divestiture of the company’s fertilizer business of €645 million in the first quarter of the previous year impacted year-ago comparisons. Adjusted for special items and amortization of intangible assets, per-share earnings were €1.67, an increase of €0.13 compared with a year ago.
BASF said first-quarter sales declined in the performance products segment, largely because of lower sales prices and negative currency effects. While sales in the nutrition and health division saw a portfolio-driven increase, they fell in the dispersions and pigments and paper chemicals divisions, especially as a result of lower sales volumes. Earnings in the segment did not match the level of the previous first quarter due mainly to lower margins resulting from higher raw material costs.
Still, the board approved a €0.10 dividend increase to €2.60 per share. In addition, the industrial bellwether backed its 2013 outlook of Gross Domestic Product (GDP) growth of 2.4%, industrial production growth of 3.4%, chemical production growth of 3.6%, an average euro/dollar exchange rate of $1.30 per euro and an average oil price for the year of $110 per barrel.
