Chemical company BASF continues growth path thru acquisitions
02 Nov '06
3 min read
For full-year 2006, Hambrecht continues to expect sales to increase to more than €50 billion and higher EBIT before special items compared with the previous year's strong level.
Strong sales growth in Chemicals segment In the Chemicals segment, BASF posted significantly higher sales (plus 67 percent) and EBIT before special items (plus 66 percent). This was primarily due to the acquired catalysts business, as well as to higher sales volumes and price increases.
BASF also recorded double-digit growth in sales (plus 10 percent) and EBIT before special items (plus 18 percent) in its Plastics segment, in particular due to the improvement in earnings in the Performance Polymers division.
Sales (plus 41 percent) and EBIT before special items (plus 11 percent) also rose by double-digit amounts in the Performance Products segment. Above all, a decline in margins for acrylic monomers negatively impacted earnings. Due to the contribution of the acquired businesses, EBIT before special items was nevertheless higher than in the third quarter of 2005.
BASF has established a new global program to further increase efficiency and streamline business processes. The program includes a number of site and plant restructuring measures. The company expects it to result in total savings of €300 million per year by 2008.
Implementation of the program will result in total one-time expenditures of €160 million as well as write-downs of €270 million, with the larger part being recorded in 2006.
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