Dr. Kurt Bock, Chairman of the Board of Executive Directors, BASF SE said ‘we had a good start to the year in our chemicals business and in the Agricultural Solutions segment. We sold more. This more than compensated for the negative effects on sales from the comparatively weak US$ and currencies in emerging markets.’ Sales however declined considerably in the oil and gas segment. At €19.5 billion, BASF Group sales were down 1% overall.
In the chemicals segment, sales matched the level of the previous first quarter. Lower prices and negative currency effects were offset by increased volumes. Sales volumes grew, particularly as a result of stronger demand in the intermediates division as well as higher volumes in the petrochemicals division, especially in North America. Earnings decreased slightly, mainly due to margin pressure.
Sales in the oil and gas segment were considerably below the level of the previous first quarter. In the natural gas trading business sector, sales volumes were significantly down year on year as a result of the mild winter in Europe. Despite lower prices for crude oil and missing volumes from offshore production in Libya, sales levels remained stable in the exploration and production business sector. This was largely due to additional volumes from Norway. Margin pressure and lower volumes in natural gas trading as well as the smaller contribution from Libya led to considerable earnings decline in the segment.
Sales at companies located in Europe decreased year on year by 3%. The considerably lower level of sales in the oil and gas segment was responsible for this.
Sales in the Asia Pacific region rose by 7% in local currency terms and by 1% in euro terms. Sales volumes increased in all segments.
Sales in the South America, Africa, Middle East region grew by 10% in local currency terms but declines by 10% in euro terms. Higher prices and improved sales volumes were only able to partly offset highly negative currency effects.
Bock said, ‘For 2014, we anticipate somewhat faster growth in the global economy than in 2013. We expect to perform well in a market environment that remains volatile and challenging. We therefore stand by our outlook for 2014 despite unfavourable currency developments. We expect a slight rise in EBIT before special items, especially as a result of considerably higher contributions from the performance products and functional materials and solutions segments.’ Sales are likely to decrease slightly due to the divestiture of the gas trading and storage business planned for the middle of 2014. EBIT will likely considerably increase. The special income arising from the planned divestiture of the gas trading and storage business should make a significant contribution here.
Adapted from press release by Claira Lloyd
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