BASF surprises with strong Q4 results

German chemicals giant BASF posted stronger than expected fourth quarter results on Thursday, saying the worst was over after its 2009 net profit was less than half from the previous year.

BASF surprises with strong Q4 results
Photo: DPA

BASF, the world’s biggest chemicals group, surprised markets with a fourth quarter net profit of €455 million ($612 million), compared with a loss of €313 million in the same period of 2008.

Analysts polled by Dow Jones Newswires had forecast an average quarterly net profit of 274 million euros.

A group statement said: “The fourth quarter of 2009 was encouraging and gives us grounds for confidence,” with chairman Jürgen Hambrecht forecasting sales growth this year.

Investors were cheered by the comments, and BASF shares shot up by 3.90 percent to €42.24 to lead morning gains on the Frankfurt stock exchange, which was 0.38 percent lower overall.

BASF reported an overall 2009 net profit of €1.41 billion, down by 51.6 percent from the figure in 2008. Sales fell by 19 percent to €50.7 billion, a statement added, while core earnings were off by more than 43 percent at €3.6 billion.

The group suffered in almost all markets owing to the global economic crisis, but said “the worst is behind us, even though dark clouds remain.

“2010 will be a transitional year with uneven development from region to region,” the statement added.

Generalised chemical production suffered losses in 2009, while specialty and agro-chemicals fared better, the group said.

It planned to trim its 2009 dividend by 25 cents to €1.70 per share after “earnings were negatively impacted by expenses for the acquisition and integration of Ciba,” a Swiss specialty chemicals company, BASF said.

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German chemical giant BASF to make car battery parts near Tesla Berlin site

German chemical giant BASF says it will build a factory making key components for electric car batteries in Brandenburg state, not far from Tesla's first European "Gigafactory" just outside Berlin.

German chemical giant BASF to make car battery parts near Tesla Berlin site
Photo: DPA

Set for a site in Schwarzheide, 100 kilometres (62 miles) from the planned Tesla plant, BASF's factory “will produce cathode active materials with an initial capacity enabling the supply of around 400,000 full electric vehicles per year,” the company said in a statement.

It did not immediately say how many jobs would be created.

The Brandenburg unit will work in tandem with a plant in Finland producing precursors for the cathodes, the part of a battery cell that passes current to the rest of the electrical circuit.

Both are scheduled to come online in 2022.

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The project “is part of our first joint European project on battery cell production,” German Economy Minister Peter Altmaier said in a statement.

Several European Union member states, led by Germany and France, have offered billions in subsidies to build up an “Airbus of batteries”, seeing the globally competitive pan-European aircraft builder as a model for future industries.

Batteries make up around 40 percent of the value of an electric car, but are currently made by companies in South Korea, China and Japan.

Although Europe's industrial giants fear for their business models built in the combustion engine age, none was prepared to take the plunge into cell-making without government help.

Across Germany in Kaiserslautern, France's Peugeot now plans a two-billion-euro ($2.2 billion) battery cell production site that will supply batteries for up to 500,000 vehicles a year by 2024.

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