Company News
February 26, 2021
BASF Results
BASF proposes stable dividend despite pandemic, sees support from organic growth
Author: Nigel Davis
2021/02/26
LONDON (ICIS)–BASF management on Friday said a €3.30/share dividend would be proposed to the annual meeting as the company generated what it called a solid cash flow in 2020 despite the pandemic.
The company reported strong earnings in the fourth quarter of the year after facing the difficult operating environment brought about by the coronavirus pandemic earlier in 2020
Financial analysts had been predicting a dividend cut. The pay out would be flat compared with 2019 but the yield would be 5.1% based on the year end share price of €64.72
The expected earnings power of the ongoing businesses and their cashflow will be sufficient to cover investments and dividend payments, CEO, Martin Brudermuller, said, outlining future dividend policy. BASF has also, effectively, put the brakes on capital spending in 2021.
“Based on our medium-term financial planning, we will also have scope to reduce our financial indebtedness,” he added.
BASF is developing what could be seen as a more sustainable business model. No major investments are planned, rather bolt-on acquisitions that add to the company’s technical expertise and regional manufacturing capabilities.
Currently, BASF is in the midst of its largest ever investment – at Nanjing in China – and is investing in battery materials.
The divestments it has on hand include the pigments business and the IPO (initial public offering) of Wintershall DEA.
“The new Verbund site in southern China and our investments in battery materials will provide additional momentum for BASF’s future growth. We will finance the strong organic growth in these areas with proceeds from our divestitures.” Brudermuller said.
“Despite high investments in these growth activities in the coming years, we expect that our portfolio will be less capital-intensive after this transformation.”
BASF has also agreed to pay performance bonuses to staff despite lower returns in 2020. The return on capital employed (ROCE) for the year sank to 1.7% compared with 7.7% in 2019, with earnings impacted by non-cash impairments of €2.9bn.
Employee performance-related compensation is determined by ROCE and for the year was below the pay-out threshold.
The BASF board, however, had agreed to pay bonuses totalling €360m as a sign it said of recognition and appreciation of work done through the pandemic. “With this bonus, we want to acknowledge the huge effort put in by the BASF team in the pandemic year 2020, which was difficult for everyone,” Brudermuller said.
The company’s share price dipped in early trading on Friday, falling 1.3% as of 12:30 GMT, despite the stable dividend and stronger fourth-quarter earnings. The tepid market response was due to conservative 2021 earnings projections undershooting analyst expectations, according to Baader Bank’s Markus Mayer.
“After BASF’s share price outperformed over the last weeks, we expect profit taking on today’s reporting,” he said.
“The reason might be prudent earnings guidance… which assumes significant disruptions to global supply chains,” he added.
February 26, 2021
BASF Results
BASF proposes stable dividend despite pandemic, sees support from organic growth
Author: Nigel Davis
2021/02/26
LONDON (ICIS)–BASF management on Friday said a €3.30/share dividend would be proposed to the annual meeting as the company generated what it called a solid cash flow in 2020 despite the pandemic.
The company reported strong earnings in the fourth quarter of the year after facing the difficult operating environment brought about by the coronavirus pandemic earlier in 2020
Financial analysts had been predicting a dividend cut. The pay out would be flat compared with 2019 but the yield would be 5.1% based on the year end share price of €64.72
The expected earnings power of the ongoing businesses and their cashflow will be sufficient to cover investments and dividend payments, CEO, Martin Brudermuller, said, outlining future dividend policy. BASF has also, effectively, put the brakes on capital spending in 2021.
“Based on our medium-term financial planning, we will also have scope to reduce our financial indebtedness,” he added.
BASF is developing what could be seen as a more sustainable business model. No major investments are planned, rather bolt-on acquisitions that add to the company’s technical expertise and regional manufacturing capabilities.
Currently, BASF is in the midst of its largest ever investment – at Nanjing in China – and is investing in battery materials.
The divestments it has on hand include the pigments business and the IPO (initial public offering) of Wintershall DEA.
“The new Verbund site in southern China and our investments in battery materials will provide additional momentum for BASF’s future growth. We will finance the strong organic growth in these areas with proceeds from our divestitures.” Brudermuller said.
“Despite high investments in these growth activities in the coming years, we expect that our portfolio will be less capital-intensive after this transformation.”
BASF has also agreed to pay performance bonuses to staff despite lower returns in 2020. The return on capital employed (ROCE) for the year sank to 1.7% compared with 7.7% in 2019, with earnings impacted by non-cash impairments of €2.9bn.
Employee performance-related compensation is determined by ROCE and for the year was below the pay-out threshold.
The BASF board, however, had agreed to pay bonuses totalling €360m as a sign it said of recognition and appreciation of work done through the pandemic. “With this bonus, we want to acknowledge the huge effort put in by the BASF team in the pandemic year 2020, which was difficult for everyone,” Brudermuller said.
The company’s share price dipped in early trading on Friday, falling 1.3% as of 12:30 GMT, despite the stable dividend and stronger fourth-quarter earnings. The tepid market response was due to conservative 2021 earnings projections undershooting analyst expectations, according to Baader Bank’s Markus Mayer.
“After BASF’s share price outperformed over the last weeks, we expect profit taking on today’s reporting,” he said.
“The reason might be prudent earnings guidance… which assumes significant disruptions to global supply chains,” he added.
February 26, 2021
Lyondell Announces BDO & Derivatives Increases
February 26, 2022
Subject: Lyondell Chemical Company; 1, 4 Butanediol and Derivatives Price Increase
Dear Valued Customer,
Effective April 1, 2021 or as contracts allow, Lyondell Chemical Company will increase its prices for 1,4 Butanediol and Derivatives Products as shown below.
Chemical Name Price Increase
1,4 Butanediol (BDO) $0.30/LB
N-Methyl-2-Pyrrolidone (NMP) – All Grades $0.30/LB
Tetrahydrofuran (THF) $0.38/LB
Polytetramethylene Glycol, PolyMEG® P1000 $0.40/LB
Polytetramethylene Glycol, PolyMEG® P2000 $0.40/LB
Polytetramethylene Glycol, PolyMEG® 650 $0.40/LB
Our acceptance of orders submitted prior to the increase date will be subject to our ability to supply. We appreciate the confidence you have placed in us as a supplier, and we look forward to our continuing business relationship.
As always, your account manager is available to work
with you or answer any questions you may have.
February 26, 2021
Lyondell Announces BDO & Derivatives Increases
February 26, 2022
Subject: Lyondell Chemical Company; 1, 4 Butanediol and Derivatives Price Increase
Dear Valued Customer,
Effective April 1, 2021 or as contracts allow, Lyondell Chemical Company will increase its prices for 1,4 Butanediol and Derivatives Products as shown below.
Chemical Name Price Increase
1,4 Butanediol (BDO) $0.30/LB
N-Methyl-2-Pyrrolidone (NMP) – All Grades $0.30/LB
Tetrahydrofuran (THF) $0.38/LB
Polytetramethylene Glycol, PolyMEG® P1000 $0.40/LB
Polytetramethylene Glycol, PolyMEG® P2000 $0.40/LB
Polytetramethylene Glycol, PolyMEG® 650 $0.40/LB
Our acceptance of orders submitted prior to the increase date will be subject to our ability to supply. We appreciate the confidence you have placed in us as a supplier, and we look forward to our continuing business relationship.
As always, your account manager is available to work
with you or answer any questions you may have.
February 26, 2021
Wanhua Completes MDI Expansion in Yantai
The Technical Transformation Of MDI Device Expansion Is Completed, And Yantai Wanhua Is Firmly Established As A Global Leader!
[Feb 26, 2021]
On the evening of February 24, 2021, Wanhua Chemical issued an announcement stating that Wanhua Chemical’s Yantai Industrial Park had an original production capacity of 600,000 tons per year for the MDI plant. Technical transformation and expansion of ton/year. The project obtained the project record certificate in June 2019, and the cumulative investment of 284 million yuan by February 2021. The successful technological transformation of this project will further enhance the company’s ability to serve customers.
Wanhua MDI’s global production capacity reached 2.6 million tons
Global market share is 28%
Wanhua’s Yantai MDI plant for this technological transformation and expansion belongs to the isocyanate integrated capacity expansion technological transformation project announced in the 2018 EIA and is the latest generation of technology. Compared with competitors, the capacity of a single device is generally only about 400,000 tons per year. Wanhua’s expanded device is the first device in the world to successfully achieve a single device capacity of 1.1 million tons per year.
The total investment of the project is 3.562 billion yuan, and the construction content includes:
MDI device (600,000 tons/year expansion to 1.1 million tons/year)
HDI and its adduct equipment (HDI 30,000 tons/year, HDI adduct 20,000 tons/year)
ADI equipment (HMDA and HMDI expanded from 10,000 tons/year to 20,000 tons/year
IPDI expanded from 15,000 tons/year to 30,000 tons/year),
Aniline plant (nitric acid plant 360,000 tons/year; nitrobenzene plant 48+240,000 tons/year; aniline plant 36+180,000 tons/year)
Hydrogen Chloride Plant (240 thousand tons/year)
HCL gas hydrochloric acid analysis device (226,000 tons/year) and supporting public works and auxiliary facilities
After the company’s Yantai MDI plant’s 500,000-ton/year technological transformation project is put into operation, its global production capacity will reach 2.6 million tons, with a market share of 28%, further consolidating its leading position in the polyurethane industry.
What is the impact of capacity expansion on MDI prices?
We expect that this expansion will be at the right time and will have little impact on MDI prices. Assuming that after the expansion of Wanhua’s capacity, the output elasticity is 200,000 to 400,000 tons/year, that is, the average monthly new output in the market is 16.67 to 33,300 tons. However, overseas production capacity is 1.06 million tons/year due to force majeure, with an average monthly gap of at least 35,000 tons. Even if the new capacity is fully opened, Wanhua cannot meet the supply gap. Huaan Securities predicts that the cold wave will affect the supply of MDI in the United States for 1-3 months. The force majeure will bring about 66,000 tons of new export demand. The total new demand in the next 10 months is about 199,000 tons, corresponding to the operating rate In the range of Wanhua Chemical’s theoretical operating rate, it has little effect on prices.
https://www.jecibiochem.com/news/the-technical-transformation-of-mdi-device-exp-42927529.html
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