The world’s largest chemical maker BASF registered an €878 million ($1.032 billion) net loss in the second quarter due to an impairment charge of its shareholding in Wintershall DEA. BASF took a hit from the coronavirus pandemic which caused a collapse in demand from the automotive industry, BASF’s most significant market. CEO Martin Brudermüller said that China is the only country that registered a V-shaped recovery. BASF’s operations in the world’s second-largest economy are recovering from the lows in the first quarter amid the height of the COVID-19 pandemic.
Sales fell 12% year-on-year to €12.7 billion ($14.9 billion) in the second quarter, mostly due to lower sales volumes which decreased by 11% over the same period. Prices declined 1%, mainly attributed to falling prices of upstream chemicals. BASF’s Surface Technologies segment recorded considerably higher prices while the Agricultural Solutions segment posted slightly higher prices, but they could not compensate for lower prices in other divisions.
EBIT before special items stood at €226 million ($267 million), plunging 77% from a year earlier. All BASF’s segments, excluding Agricultural Solution and Nutrition & Care and Other, posted lower earnings, as a result of a steep decline in demand in most of the group’s customer industries. The Chemicals and the Materials segments contributed to 70% of the earnings fall.
Operating cash flows increased to €2.2 billion ($2.6 billion) in the second quarter of 2020 from €1.9 billion a year ago. The increase was primarily attributed to a €336 million ($395 million) increase in cash released from net working capital. Free cash flow stood at €1.5 billion ($1.8 billion), increasing by more than €500 million from the second quarter of 2019.
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Published on July 30, 2020 3:57 PM (GMT+8)Last Updated on July 30, 2020 3:57 PM (GMT+8)
