"At EUR 454 million, earnings in North America surpassed the level of the previous first quarter by EUR 88 million. Excellent performance by Agricultural Solutions coupled with effective cost-control measures in our businesses and functions led to this significant increase in earnings," said Hans Engel, CEO of BASF Corporation and Chief Financial Officer of BASF SE.
Outlook for 2013 confirmed
The company's expectations for the global economic environment in 2013 remain unchanged:
•Growth of gross domestic product: 2.4 percent •Growth in industrial production: 3.4 percent •Growth in chemical production: 3.6 percent •An average euro/dollar exchange rate of $1.30 per euro •An average oil price for the year of $110 per barrel
Bock: "We expect global economic growth to pick up only slightly in 2013. The chemical industry will increase production again compared to 2012 because the emerging markets are growing. However, we do not expect a straight-line trend. The market environment remains volatile." Economic growth would be impaired by an intensification of the debt crises in the eurozone and the United States as well as by lower demand in Asia.
"We stand by our outlook for 2013: We continue to aim to exceed the 2012 levels in sales and EBIT before special items," said Bock.
Business development in the segments in the first quarter
The Chemicals segment posted a decline in sales in the first quarter. This was mostly due to lower sales volumes, which were mainly attributable to plant shutdowns in the Petrochemicals division. Sales volumes in the Monomers and Intermediates divisions increased thanks to higher demand. As a result of better margins, earnings considerably surpassed the level of the first quarter of 2012.
Sales declined in the Performance Products segment, largely because of lower sales prices and negative currency effects. While sales in the Nutrition & Health division saw a portfolio-driven increase, they fell in the Dispersions & Pigments and Paper Chemicals divisions, especially as a result of lower sales volumes. Earnings did not match the level of the previous first quarter due mainly to lower margins resulting from higher raw material costs.
Sales in the Functional Materials & Solutions segment matched the level of the first quarter of 2012. Higher sales volumes compensated for negative currency effects. The Performance Materials division in particular posted an increase in volumes. By contrast, sales volumes declined in the Construction Chemicals division on account of weather conditions. Earnings for the segment decreased due to the lower contribution from the Catalysts division.
Sales rose significantly in the Agricultural Solutions segment. The very good start to the season in Europe and North America largely contributed to this. In addition to sharply increased sales volumes, sales growth was also boosted by higher prices as well as the acquisition of Becker Underwood. Earnings significantly increased thanks to higher volumes.
Despite lower crude oil prices, sales grew considerably in the Oil & Gas segment. This was mainly attributable to higher production and trading volumes. Pressure continued to rise on trading margins in the Natural Gas Trading business sector. Earnings for the segment therefore remained just below the level of the first quarter of 2012.
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