BASF profits soar in third quarter
BASF AG has reported that earnings in the latest quarter more than doubled as improving sales and cost-cutting efforts began to take effect.
The German chemicals giant posted a net profit of Eur247 million ($249 million) in the third quarter, compared with Eur123 million the year before. Excluding special items, interest and taxes, profits showed a spectacular 80% increase to Eur591 million ($595 million). Sales surged in September after a lacklustre first nine months to the year, underpinning a 5.3 percent increase in quarterly sales to Eur7.6 billion ($7.7 billion) from Eur7.2 billion the year before.
Cost cutting measures such as the previously announced plan to take 4,000 jobs out of the business by the end of 2003 added to the bottom line, the company said. BASF is looking to save Eur1 billion ($1 billion) a year under its cost-cutting programme. Since the end of last year the company has shed more than 1,400 jobs from a total work force of 93,200.
Sales by the company’s ‘Performance Chemicals’ division, offering products for the leather industry, edged up 1.9% to Eur839 million, with the year-to-date figure remaining flat at Eur2.6 billion.
Another Eur100 million euros ($101 million) in costs should be saved at its agrochemicals division, the company said, after its recent closure of a small formulation facility in its Hannibal, Mo., plant. All the employees affected were reassigned elsewhere in the plant.
"Our confidence is based on the major efforts that BASF and its employees have taken since the first signs of an economic downturn were seen in early summer 2001," chief executive Juergen Strube said in a statement With the exception of the seasonally weak agricultural business, all its divisions made a pretax profit in the third quarter, the company said. Pricing pressures did remain a concern, however.
