BASF Profits Take Hit in 2015
BASF profit hit, takes write-downs over weak oil
Published: Jan 27, 2016 1:51 a.m. ET
FRANKFURT–Chemicals giant BASF SE said profit fell an unexpectedly sharp 18% last year, knocked lower by lower prices for oil and gas in the fourth quarter which have led to write-downs on the value of its energy business.
The group, one of the mainstays of German industry, said on Wednesday that earnings before interest and taxes fell to EUR6.2 billion ($6.76 billion) in the year to end-December, down over EUR7.6 billion in 2014, in announcing preliminary full-year results.
Previously, the company had said it expected a slight decline.
Revenue fell 5% to EUR70.4 billion last year from EUR74.3 billion a year earlier.
Prices for oil and gas fell significantly in recent months, and prices are likely to remain low in 2016, BASF said. The company also said it lowered its earnings estimates for subsequent years.
"This results in impairments of around EUR600 million in the oil & gas segment," BASF said.
"This amount, which doesn't affect cash flow, is reported as a special item and reduces [earnings before interest and taxes] in the oil & gas segment in the fourth quarter of 2015," BASF said.
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