German chemical major BASF remained on its path to success in the second quarter of 2005 and again posted very strong earnings. Sales rose 14 percent to €10.6 billion compared with the second quarter of 2004; income from operations (EBIT) before special items climbed 31 percent to €1.7 billion.
Cumulative sales in the first half of 2005 amounted to €20.7 billion, or almost 13 percent more than in the same period of the previous year. In the first half, BASF increased EBIT before special items by 32 percent to €3.2 billion compared with 2004.
Sales growth was primarily due to urgently needed price increases. Although raw material costs were volatile and rose continuously, BASF succeeded in gradually raising its margins to the necessary level. The good volume growth of 3 percent in the second quarter and 2 percent in the first half builds on the already strong level posted in 2004 and fits with the company's “value over volume” concept.
During his presentation of the quarterly results on August 3, 2005, BASF Chairman Dr. Jürgen Hambrecht thanked all employees for their outstanding performance in a difficult economic environment: “Prices for raw materials, and for crude oil in particular, have reached unprecedented levels. Economic growth remains weak in many parts of Europe. The geopolitical situation remains tense.”
Outlook for full year 2005: Stronger performance than in 2004
Hambrecht expects the chemical industry to continue on a growth path in the second half of the year. At approximately 3 percent, however, he anticipates production growth for the full year to be slower than in the record year 2004, which represents a very high baseline for further growth. The strongest impulses for growth are again likely to continue to come from North America and Asia.
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