BASF continue to grow profitably3 November 2005
BASF continued on their growth path in the third quarter of 2005. This was confirmed by a further improvement in the figures presented at the company's Autumn Press Conference in Ludwigshafen. The strong business performance seen in the first half of the year maintained its momentum in the third quarter. The summer lull was less pronounced than expected. With strong demand on the one hand, and very high and very volatile oil prices on the other, necessary price increases could be passed on to the market only to a limited degree. Compared with the same quarter of 2004, sales increased by 11% to €10.4 billion. Income from operations (EBIT) before special items rose by 13% to more than €1.3 billion. Cumulative sales for the first nine months of the year rose by more than 12% to €31 billion. BASF's profitable growth is underlined by the fact that EBIT before special items increased by 26% to €4.5 billion. Optimistic outlook for the full year 2005 Demand for BASF's products remains strong. Further increases in raw materials and energy costs continue to put pressure on margins. For the full year 2005, Dr Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft, expects significantly higher sales and EBIT before special items compared with the previous year's strong level. 'We therefore expect to further increase the premium earned on our cost of capital', he said. In the fourth quarter of 2005, BASF do not anticipate earnings to reach the strong level posted in 2004. Reasons for this include: * Expected earnings impairments of €120 million as a result of production losses due to the hurricanes in the United States. * The lack of gains of €80 million posted in the fourth quarter of 2004 as a result of mark-to-market accounting for derivatives associated with the weak US dollar.