Urethane Blog
BASF Releases Plan
September 26, 2024
BASF to cut dividend for next four years, shed non-core assets in overhaul
Sep. 26, 2024 7:25 AM ETBASF SE (BASFY) StockBFFAFBy: Carl Surran, SA News Editor
BASF (OTCQX:BASFY) -2.7% in Frankfurt trading Thursday after cutting its dividend and raising the possibility of splitting off some businesses, in a broad corporate overhaul that could include further plant closures in Germany as it grapples with weak demand in Europe.
New CEO Markus Kamieth outlined plans to sharpen BASF’s (OTCQX:BASFY) focus on its core operations and said the company will consider options for non-core businesses including battery materials, coatings and environmental catalyst, and metal solutions.
The new measures also include preparing for a possible listing of its agricultural unit, which makes crop protection products such as herbicides and fungicides, and reported ~€10B ($11.1B) in sales last year.
In addition to its portfolio adjustments, BASF (OTCQX:BASFY) said it plans to pay out an annual dividend of at least €2.25/share during 2025-28, down from €3.40/share it paid for 2023.
The company anticipates an aggregate dividend payment of ~€8B in the four-year period, while buybacks are expected to total ~€4B.
BASF (OTCQX:BASFY) said it forecasts EBITDA before special items of €10B-€12B in 2028, compared to €7.67B earned in 2023, and more than €12B in cumulative free cash flow during 2025-28 while reducing capital spending below depreciation from 2026, after a complex it is building in China begins operations.
The company said it is evaluating additional cost-cutting measures at its flagship Ludwigshafen site in Germany.
“Whilst its 2028 earnings targets are broadly in line with consensus, the reliance on mid/upcycle conditions with limited visibility in conjunction with the extent of the dividend reduction is likely to disappoint,” Jefferies analysts said.
Sign Up for Email Updates
Everchem Updates Archive