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BASF sees 2012 earnings slip on weaker chemical demand, higher taxes; raises dividend

By: The Associated Press

Tuesday, Feb. 26, 2013 at 7:40 AM | Comments: 0

CEO of BASF, Kurt Bock, attends a press conference in Ludwigshafen, Germany, Tuesday Feb. 26, 2013. THE CANADIAN PRESS/AP, dpa, Uwe Anspach

FRANKFURT - Higher raw materials costs and slow demand at BASF SE's basic chemicals business combined to push the company's earnings in 2012 lower.

Booming sales at the company's oil and gas division were also blunted by higher taxes and a one-time charge, BASF said Tuesday.

Overall, net profit fell 21 per cent to €4.89 billion despite a 7 per cent rise in sales to €78.7 billion.

Still, BASF said profits would rise this year and raised its dividend by 10 cents to €2.60 ($3.46) a share.

A more detailed look at the earnings showed that earnings at the chemicals division fell 30 per cent on higher raw materials costs and following a slow year for the entire industry.

The division makes substance that serve as the starting material for a wide range of products, including detergents, plastics, textiles, paint, and pharmaceuticals.

A division making more complex substances for use in things like vitamins and food additives also saw earnings fall.

The oil and gas division and its farm products business both saw strong jumps in sales. Oil and gas sales jumped 39 per cent after the restart of the company's operations in Libya following the civil war there.

Higher taxes led to a profit increase of only 13 per cent, and there was a €120 million charge related to the company's stake in the troubled Yme offshore gas platform off the coast of Norway. The platform had to be evacuated last year due to cracks in its concrete foundation.

The comparison with 2011 figures was skewed by a gain that year from the sale of shares in fertilizer company K+S.

Fourth quarter profit fell 13 per cent to €980 million on sales that rose 8.7 per cent to €19.6 billion.

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