BASF Profit Dented by Oil, Gas Business -- Update
October 27 2016 - 2:26AM
Dow Jones News
By William Wilkes
FRANKFURT--BASF SE (BAS.XE) reported a fall in third-quarter
profit due to smaller contributions from its oil and gas segment
and reiterated its full-year outlook.
The German chemical company's net profit was 888 million euros
($968.26 million) in the three months ending Sept. 30, down 27%
from EUR1.21 billion a year earlier. BASF had released preliminary
results on Oct. 11.
Revenue declined 20% to EUR14.01 billion following the
divestiture of BASF's natural gas trading and storage business to
Russia's OAO Gazprom. Earnings before interest and taxes, EBIT
decreased 22% to EUR1.46 billion.
BASF said the recent fire at its Ludwigshafen factory complex
will negatively impact earnings for the business year, but the
company reiterated its guidance for the year.
BASF's overall earnings have been weighed down for nearly two
years by low global oil prices, which have directly hit its
wholly-owned oil and gas division, Wintershall Holding GmbH.
Germany's largest crude oil and natural gas producer,
Wintershall contributes about 30% to BASF's total cash flow. The
division offers BASF a strategic hedge when oil prices are high,
and in the past, it has been able sustain the chemical divisions'
need for energy and raw material.
BASF's chemical divisions have also been hurt by low raw
material prices. The company cited this volatility in June when it
said it would delay a final decision on investing in the
construction of a methane-to-propylene complex at a BASF site in
Texas, a project that has been under consideration for about two
years.
-Write to William Wilkes at william.wilkes@wsj.com
(END) Dow Jones Newswires
October 27, 2016 02:11 ET (06:11 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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