BASF sees earnings fall on slower business cycle, supply chain worries

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A cyclist rides his bike past the entrance to the BASF factory and former Ciba production site at Schweizerhalle near Basel, Switzerland July 7, 2009. REUTERS/Christian Hartmann

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FRANKFURT, Feb 25 (Reuters) – BASF (BASFn.DE) on Friday forecast lower operating profits for 2022 due to slowing economic growth as the German chemicals giant’s supply chain vulnerable to disturbances.

The company said earnings before interest, taxes and special items would likely be between 6.6 billion euros ($7.4 billion) and 7.2 billion euros this year, down from 7.77 billion euros. euros in 2021.

Despite a very strong start to the year, “BASF expects global economic growth of 3.8% to be somewhat more subdued in 2022 after the very strong recovery of 2021”.

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The forecast takes into account the risk of supply chain disruptions, more pandemic headwinds and potentially higher energy prices, BASF said.

The German group did not provide an update on its results concerning the plans for the IPO of shares of the Wintershall Dea joint venture. Nearly half of the joint venture’s oil and gas production comes from Russian extraction sites.

BASF declined to comment on the joint venture’s IPO plans. A media call after the results is scheduled for 08:30 GMT.

Wintershall said on Thursday that a “politically motivated” cancellation of Gazprom’s Nord Stream 2 gas pipeline, which Wintershall co-financed, would allow its operator to file compensation claims. Read more

Germany effectively halted ramping up preparations for the pipeline following an initial wave of sanctions against Russia, where Wintershall has been active for more than three decades. Read more

Moscow launched a land, sea and air assault on Ukraine on Thursday in the biggest attack on a European state since World War II, drawing international condemnation. Read more

Any impact from BASF’s stake in Wintershall is not included in the group’s outlook for adjusted profit, the German company said.

BASF owns 67% of the common voting shares of Wintershall, or a total of 72.7% including the non-voting preferred shares. Russian billionaire Mikhail Fridman’s investment firm, LetterOne, the former owner of Wintershall, owns the rest.

BASF Group’s EBIT, adjusted for one-time items, rose more than 10% to 1.23 billion euros in the three months to December, missing a company-compiled estimate of 1.35 billion euros. euros.

The German company offered an annual dividend of 3.40 euros per share, slightly above expectations of 3.39 euros.

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Reporting by Ludwig Burger; Editing by Kirsti Knolle and Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.

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