Extract
BASF Continues to Grow Profitably.
LUDWIGSHAFEN, Germany -- BASF
-- Higher sales (plus 11 percent) and EBIT before special items (plus 13 percent) -- Earnings impacted by high raw material prices and hurricanes in the United States -- Cost saving goals increased in North America -- Outlook for full year 2005 improved further: -- Significant increase in sales and EBIT before special items -- Further increase in premium on cost of capital BASF (NYSE:BF)(FWB:BAS)(LSE:BFA) continued on its growth path in the third quarter of 2005. This was confirmed by a further improvement in the figures presented at the company's Fall 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 percent to EUR 10.4 billion. Income from operations (EBIT) before special items rose by 13 percent to more than EUR 1.3 billion. Cumulative sales for the first nine months of the year rose by more than 12 percent to EUR 31 billion. BASF's profitable growth is underlined by the fact that EBIT before special items increased by 26 percent to EUR 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. Jurgen 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 does not anticipate earnings to reach the strong level posted in 2004. Reasons for this include: --Expected earnings impairments of EUR 120 million as a result of production losses due to the hurricanes in the United States. --The lack of gains of EUR 80 million posted in the fourth quarter of 2004 as a result of mark-to-market accounting for derivatives associated with the weak U.S. dollar. Necessary price increase in all chemical segments BASF's Chief Financial Officer, Dr. Kurt Bock, took special note of the company's net income of EUR 808 million: "That is more than double the figure of EUR 366 million that we posted in the same quarter of 2004." At EUR 2.5 billion, net income in the first nine...See the full content of this document
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