BASF SE (BAS.XE) said Thursday that second-quarter profit jumped despite a drop in sales after the company booked a sizeable gain from the spinoff of its oil-and-gas business.

The chemical company’s net profit grew to 6.46 billion euros ($7.20 billion) from EUR1.48 billion in the same period a year earlier. The boost was predominantly due to the merger of BASF’s oil-and-gas business Wintershall and DEA Deutsche Erdoel, which was completed in May.

Sales fell to EUR15.16 billion from EUR15.78 billion, due to lower sales volumes in all business segments except nutrition and care, the company said.

The results follow a warning earlier this month, when BASF said it would miss expectations due to lower industrial production, a weak North American agricultural sector and a growth downturn in the automotive industry.

BASF is in the midst of an overhaul aimed at boosting profitability. In June it said would cut roughly 5% of its workforce. Around 1,100 of the 6,000 employees affected have so far signed severance agreements, the company said Thursday, adding that it plans provisions of EUR260 million for the cuts.

In the second quarter, BASF’s earnings before interest and taxes before special items–which strips out the effects of the oil-and-gas deal–was EUR1.05 billion, down 47% from the same period the previous year. BASF said results were particularly hit by declining earnings in the chemicals and materials segments.

The company said the macroeconomic environment became challenging in the second quarter and global trade conflicts such as the one between the U.S. and China were a “serious concern.”

Chief Executive Martin Brudermueller said he didn’t expect that dispute to be resolved before next year. The company initially estimated it would be resolved by the middle of this year.

BASF backed its outlook for the full year, which it adjusted in early July. It forecasts a slight decline in sales and a drop of up to 30% in EBIT before special items.

https://www.morningstar.com/news/dow-jones/201907253614/basf-2q-sales-fell-profit-jumped-due-to-wintershall-spinoff-update