BASF says dividends, asset values under review as pandemic bites
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(BASF.com)
Stammwerk der BASF Gruppe Ludwigshafen. Wassertank am Rheinufer in Ludwigshafen.Das Herz der BASF-Gruppe ist die BASF SE mit ihrem Stammwerk in Ludwigshafen am Rhein. Mit etwa 250 Produktionsbetrieben, vielen hundert Labors, Technika, Werkstätten und Büros ist es der größte zusammenhängende Chemiekomplex der Welt. Abdruck honorarfrei. Copyright by BASF. Headquarters of the BASF Group Ludwigshafen. Tank on the bank of the Rhine in Ludwigshafen. The heart of BASF Group is BASF SE headquartered in Ludwigshafen, Germany. With about 250 production plants, several hundred laboratories, technical centers, workshops and offices, it is the largest integrated chemical complex in the world. Print free of charge. Copyright by BASF.
Frankfurt | Reuters – Germany’s BASF said on Wednesday its dividend policy and the value of assets on its balance sheet might be revised given uncertainty caused by the coronavirus crisis, particularly in North America and Europe.
The policy of the world’s largest chemicals and plastics maker by sales to increase dividends each year and its longer term target of lifting adjusted core earnings by 3-5 percent annually were under review, Chief Executive Martin Brudermueller said.
More write downs, similar to the 800 million euro ($903 million) impairment German energy group Wintershall DEA unveiled this month, could also be on the cards for BASF in the next two quarters, finance chief Hans-Ulrich Engel warned.
“There is a considerable risk that both the economic recovery and the medium to long-term overall business development will be slower than what we saw before the corona-pandemic,” the chief executive told a call with reporters.
BASF, which is cutting 6,000 jobs, said it could not predict 2020 sales and earnings due to the economic uncertainty, after it released detailed second-quarter results earlier this month.
BASF limited predictions to saying operating profit before special items in the third quarter would not improve significantly in the second quarter, citing the usual summer lull and seasonally lower demand for agricultural products.
BASF reported second-quarter operating profit before one-off items fell 77 percent to 226 million euros ($265 million).
The auto industry, BASF’s largest customer group, saw a collapse in demand in April to June, while ingredients for household products provided some stability, the company said.
Chemical production, used by BASF as a demand gauge, was in “a V-shaped recovery” in China, where the auto market returned to 10 percent growth in the second quarter, but prospects for North America and Europe remained uncertain, it said.
($1 = 0.8529 euros)
