(Bloomberg) -- BASF SE’s earnings declined slightly in the second quarter after prices fell across its chemicals business.
Earnings before interest, taxes and special items fell 3.7% to €969 million ($1.1 billion), BASF said Friday, adding that gains in its industrials solutions unit were dragged down by lower prices for ammonia-based products. The result slightly missed analyst forecasts.
Demand for chemicals has dropped again and orders slumped in June, according to a survey by the Ifo institute amid an industry marked by job and output cuts. While specialty-chemicals maker Lanxess AG flagged improvements last week, it cautioned that it doesn’t see a broader market recovery yet. BASF left its outlook unchanged.
The German company in February deepened savings measures at its main site in Ludwigshafen to trim €1 billion from annual costs by 2026. Those and other efficiency measures are going ahead as planned, BASF said Friday.
“Results were mostly in line with our expectations,” Citi analyst Sebastian Satz said in a note, adding that volume growth was strong in the chemicals and industrial solutions units while “surprisingly weak” in the materials and agricultural divisions.
Shares traded down 2.4% at 10:47 a.m. in Frankfurt, bringing the stock’s losses this year to 11%.
The company also plans to shut down two smaller sites in Germany and is reviewing investment plans for battery materials as growth of electric-vehicle sales stalls.
BASF, which makes cathode materials, said it will add new capacity “only where we have secured longer-term offtake agreements with established cell manufacturers.”
In June, BASF abandoned plans for a $2.6 billion nickel-cobalt refinery joint-venture in Indonesia. It’s considering layoffs at its Finnish battery materials plant, and stepped back from plans to invest in lithium mining assets in Chile. On Friday, it also said it’ll pause plans for a battery recycling site in Spain.
(Updates with analyst comment in fifth paragraph, shares in sixth.)
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