BASF Backs Guidance After Cost-Cutting Offsets Revenue Hit From Lower Prices
By Helena Smolak
BASF backed its full-year outlook as it posted flat second-quarter earnings after cost-saving measures offset a decline in sales due to lower prices across all segments.
The German chemical giant on Friday posted second-quarter sales of 16.11 billion euros ($17.47 billion), down from EUR17.31 billion the previous year. Lower prices amid depressed raw-material and energy prices weighed on its revenue, the company said.
Earnings before interest and taxes, depreciation and amortization before special items--the company's preferred key metric--stood at EUR1.957 billion, up 0.6%. The company said its chemical businesses made a stronger earnings contribution there was a considerable earnings decline at its agricultural solutions business.
Analysts had expected sales of EUR16.74 billion on Ebitda before special items at EUR2.05 billion, according to a consensus forecast provided by Vara Research.
BASF reiterated its full-year guidance, targeting Ebitda before special items of between EUR8.0 billion and EUR8.6 billion. Its free cash flow is expected at between EUR0.1 billion and EUR0.6 billion, weighed by temporarily higher capital expenditure.
The company said its on track to achieve its EUR2.1 billion annual cost-savings target by the end of 2026, and expects an annual cost reduction of around EUR800 million with associated one-time costs of around EUR550 million.
Write to Helena Smolak at helena.smolak@wsj.com
(END) Dow Jones Newswires
July 26, 2024 01:23 ET (05:23 GMT)
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