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Germany : Good start to the year in chemicals business, oil and gas business considerably down

May 2, 2014

We had a good start to the year in our chemicals business and in the Agricultural Solutions segment. We sold more. This more than compensated for the negative effects on sales from the comparatively weak U.S. dollar and currencies in emerging markets, said Dr. Kurt Bock, Chairman of the Board of Executive Directors, at the Annual Shareholders Meeting of BASF SE in the Congress Center Rosengarten in Mannheim. Sales declined considerably in the Oil & Gas segment, however. At 19.5 billion, BASF Group sales were down by 1% overall.

Income from operations (EBIT) before special items amounted to 2.1 billion, 3% below the level of the first quarter of 2013. While earnings in the Performance Products and Functional Materials & Solutions segments improved significantly, the contribution from the Oil & Gas segment fell considerably.

EBIT included a total of 109 million in special items in the first quarter of 2014. This was largely attributable to special income from the divestiture of shares in non-BASF-operated oil and gas fields in the British North Sea. EBIT therefore grew year-on-year by 80 million to reach 2.2 billion. EBITDA rose by 96 million to 3.0 billion. The financial result decreased by 57 million to minus 183 million.

Income before taxes and minority interests improved year-on-year by 23 million to 2.1 billion. Net income grew by 31 million to 1.5 billion. Earnings per share were 1.61 in the first quarter of 2014, compared with 1.57 in the same period of 2013.

Outlook for 2014 confirmed The company s expectations for the global economic environment in 2014 remain unchanged: Growth of gross domestic product: 2.8% Growth in industrial production: 3.7% Growth in chemical production: 4.4% An average euro/dollar exchange rate of $1.30 per euro An average oil price for the year of $110 per barrel

Bock: For 2014, we anticipate somewhat faster growth in the global economy than in 2013. We expect to perform well in a market environment that remains volatile and challenging. We therefore stand by our outlook for 2014 despite unfavorable currency developments. We expect a slight rise in EBIT before special items, especially as a result of considerably higher contributions from the Performance Products and Functional Materials & Solutions segments. Sales are likely to decrease slightly due to the divestiture of the gas trading and storage business planned for the middle of 2014. EBIT will likely considerably increase. The special income arising from the planned divestiture of the gas trading and storage business should make a significant contribution here.

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Source: TendersInfo (India)

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