Germany’s BASF said it was aiming for a gain of up to 10 percent in group operating profit this year as it bets on a rebound in specialty chemicals to offset an expected weaker performance in basic petrochemicals.
The chemicals maker is coming off a strong year where supply bottlenecks and strong demand across the petrochemicals industry boosted earnings.
Its basic chemicals unit saw earnings before interest and tax (EBIT) adjusted for one-off items surge by 67 percent in the fourth quarter, the company said on Tuesday.
However, it expects adjusted EBIT at the unit to drop by 11 percent or more in 2018, it said.
That forecast, combined with a proposed annual dividend of 3.10 euros per share which fell short of expectations, saw BASF shares fall 1.6 percent to 87.44 euros as of 1128 GMT, making them the third-worse performer on Germany’s blue-chip DAX index.
BASF, which last month reported a 2017 operating profit up 32 percent, issued divisional results on Tuesday which showed that specialty products, something the company is looking to for growth, underperformed.
Morgan Stanley analysts said its performance in specialty products was “a little disappointing”.
Helping, however, were profit margins at its commodity chemicals unit which rose to close to 26 percent of sales in 2017, almost double their average over the previous five years, mirroring similar developments at rivals such as Covestro .
BASF and its rivals are ramping up output capacity, most notably for chemicals used in building insulation or furniture, which will likely ease supply shortages.
BASF also aims to overcome the weakness at its advanced and customised products, such as food nutrients, ingredients for household products or engineering plastics.
“The downstream segments in 2018 clearly need to improve their performance,” said Kepler Cheuvreux analyst Christian Faitz.
BASF also said its Wintershall oil and gas division, which it is seeking to merge with Russian billionaire Mikhail Fridman’s DEA, should help raise profits this year helped by a strong oil price.
By Ludwig Burger
Source: Reuters
CF Industries Holdings, Inc. (NYSE: CF) today announced that it has closed its acquisition of Incitec Pivot Limited’s (“IPL”) ammonia production complex located in Waggaman, Louisiana. Under the terms of the agreement, CF Industries purchased the Waggaman ammonia plant and related assets for $1.675 billion, subject to adjustments.
The Virgin Atlantic flight was powered entirely by SAF, that was a drop-in replacement for conventional jet fuel, but made solely from sustainable feedstocks. This was enabled through the inclusion of a new bio-based aromatic jet fuel blending component.
Cepsa SA (Madrid) has agreed a deal with C2X, an independent firm owned by AP Moller Holding with AP Moller-Maersk as minority owner, to develop a 300,000 metric tons per year renewable methanol plant at Huelva, Spain.