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Asian business boosts BASF Q1 profit

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Asian business boosts BASF Q1 profit
Photo: DPA
09:15 CEST+02:00
The world's leading chemical company, BASF, posted Thursday a better than expected first quarter profit on the back of strong demand from Asian economies and inventory build up.

BASF said its three months to March net profit jumped 174 percent from a year earlier to €1.03 billion ($1.36 billion) on sales up 26 percent to €15.5 billion.

"We have thus almost achieved the level of the very good quarters before the crisis," group chairman Jürgen Hambrecht said in a statement, while remaining cautious for the rest of the year.

Analysts polled by Dow Jones Newswires had expected net profit to jump 134 percent and sales to come in with a 19 percent increase.

BASF did not raise its full year targets but still expects an increase in sales and a marked increase in core earnings, which reached €3.6 billion in 2009, a statement said.

All of the group's regions posted double digit increases in first quarter sales, with Asia up 73 percent to €2.5 billion.

Industrial demand has rebounded, especially in the automotive, electronic and electrical industries, and was generally widespread, although "Europe is bringing up the rear," Hambrecht said.

Core earnings before special items gained 98 percent to €1.95 billion in the first quarter, mainly owing to higher capacity utilisation, BASF said.

The German group's US rival, Dow Chemical, posted on Wednesday a 15-fold increase in net profit to $552 million, also exceeding market expectations.

Looking ahead, the BASF chief was cautious however, noting that "the recovery remains shaky" owing to the continuing financial and debt crisis, the unwinding of stimulus programmes and volatile raw materials markets.

Hambrecht expected the economic recovery "to become slower and increasingly uneven" this year.

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