BASF announces fourth quarter and full year 2012 results.
Full year 2012:
-Sales €78.7 billion (plus 7%)
-EBIT before special items €8.9 billion (plus 5%)
-Record year in Agricultural Solutions and Oil & Gas; earnings in the chemicals business below prior year
4th quarter 2012:
-Sales €19.6 billion (plus 9%)
-EBIT before special items €1.8 billion (plus 18%)
-Dividend proposal €2.60 (2011: €2.50)
-Outlook 2013: Increase in sales and earnings targeted
BASF maintained its good performance in 2012. The company exceeded the 2011 record levels in sales and income from operations (EBIT) and once again earned a substantial premium on the cost of capital. Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE, said: “The Oil & Gas and Agricultural Solutions segments achieved new records, while development in our chemicals business was weaker than in 2011.”
Sales in the fourth quarter of 2012 were €19.6 billion, 9% higher than in the same quarter of the previous year. This increase was mainly due to higher volumes in almost all segments as well as price and currency effects. At €1.8 billion, EBIT before special items was 18% above the level of the previous fourth quarter, mainly due to significantly higher volumes in Oil & Gas as well as improved earnings in Polyurethanes and Construction Chemicals.
For the full year, BASF increased sales to €78.7 billion, up 7% compared with 2011. EBIT before special items improved by 5% to €8.9 billion and EBIT by almost 5% to around €9 billion. Net income fell by €1.3 billion to €4.9 billion, due in part to the higher earnings contribution from Oil & Gas and thus the significantly higher taxes. Furthermore, gains from the sale of BASF’s shares in K+S Aktiengesellschaft in 2011 were predominantly tax-free.
At the Annual Shareholders’ Meeting, the Board of Executive Directors and the Supervisory Board will propose a higher dividend of €2.60 per share. This is an increase of €0.10 compared with the previous year. Based on the 2012 year-end share price of €71.15, the dividend yield would be 3.65%.
“At €6.7 billion, cash flow from operating activities once again reached a high level,” said Dr. Hans-Ulrich Engel, Chief Financial Officer of BASF. The equity ratio of 40.1% remained at a high level.
Outlook for 2013
BASF’s outlook for 2013 is based on the following economic conditions (previous year figures in parentheses):
-World economic growth: +2.4% (+2.2%)
-Growth in global chemical production: +3.6% (+2.6%)
-An average euro/dollar exchange rate of $1.30 per euro ($1.28 per euro)
-An average oil price of $110/barrel ($112/barrel)
“We aim to grow again in 2013 and exceed the 2012 levels in sales and EBIT before special items,” said Bock. The company strives to increase sales and earnings in all operating segments. The expected increase in demand, together with measures to improve operational excellence and raise efficiency, will contribute to this. BASF aims to earn a high premium on its cost of capital once again in 2013.
Bock said: “Innovations are the basis for future profitable growth and thus lie at the core of our competitiveness.” Therefore, BASF will once again increase its research and development spending in 2013, after expenditures of €1.7 billion in the past year – around 9% more than in 2011.
Sales increase in almost all segments in the fourth quarter
In Chemicals, sales in the fourth quarter 2012 increased, equally driven by price and portfolio effects. Volume growth and currency tailwinds also contributed to topline growth. EBIT before special items declined mainly due to lower margins and plant shutdowns. For the full year 2012, sales increased by 7% to €13.8 billion. EBIT before special items decreased by 30% to €1.7 billion.
Sales in Oil & Gas in the fourth quarter grew strongly mainly due to significantly increased oil production in Libya and higher volumes from Natural Gas Trading. The start-up of additional wells in the Achimgaz joint venture also contributed to sales. EBIT before special items grew substantially. Special items of €120 million were related to impairment charges on the Yme development project in Norway. Non-compensable taxes on oil production amounted to €492 million. Net income decreased by 9% and was €250 million. For the full year, sales rose by 39% to €16.7 billion and EBIT before special items almost doubled to €4.1 billion. Net income also grew to €1.2 billion.
In the fourth quarter, sales in other were around €1.2 billion. These activities include the sale of raw materials, engineering and other services, rental income and leases. EBIT before special items declined by €91 million mainly due to lower earnings of other businesses. In 2012, sales were €4.8 billion, a decline of 24% and EBIT before special items decreased to minus €839 million. This was primarily due to the divestiture of the styrenic plastics activities and the fertilizer business.
About BASF
BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. Wecombine economic success with environmental protection and social responsibility. Through science and innovation, we enable our customers in nearly every industry to meet the current and future needs of society. Our products and solutions contribute to conserving resources, ensuring nutrition and improving quality of life.
Source:
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