Ludwigshafen, Germany – BASF SE has lowered its forecast for 2018 earnings, due to lower-than-expected results in November.
The Ludwigshafen-headquartered company said 7 Dec that based on the November earnings data, it now expects “a considerable decrease in income”. According to current projections, EBIT before special items for the fiscal year 2018 will be some 15% to 20% lower than the 2017 level of €7.64 billion.
BASF had previously forecast a decline of up to 10% compared with the prior-year figure.
The significant decline in earnings, said BASF, is mainly attributable to the Chemicals segment.
In particular, the company noted a sharp fall in prices for isocyanates which are used for producing elastomers, foams, coatings, adhesives and sealants.
Steam cracker margins were also lower than expected.
In addition, the low water level of the Rhine River in the fourth quarter of 2018 is expected to lead to negative earnings impacts of up to €200 million, BASF added. In the third quarter, the negative earnings impact from the low water level of the Rhine was limited to €50 million.
Furthermore, BASF added that its business with the automotive industry had declined since the third quarter of 2018. In particular, demand from customers in China slowed significantly, due to the China-US trade war.