Patricia Weiss and Miranda Murray
BERLIN (Reuters) – Germany’s BASF started the year with falling sales and adjusted profit, giving the chemicals company’s new chief executive plenty to do as he takes the reins on Thursday at a company plagued by weak industry-wide demand and high production costs.
Outgoing CEO Martin Brudermüller will answer questions for the last time in front of some 5,000 shareholders before Markus Kamiet, the group’s former head of Asia, takes over.
Brudermüller, who confirmed the company’s annual profit forecast, expressed hope that the worst was over.
BASF shares rose 1.1% in early trading in Frankfurt.
Orders are recovering slowly, Brudermueller told analysts on a call, but said it was too early to talk about a fundamental change.
“To do this, we need to see a continuation of the current positive trend in the coming quarters,” he said.
Brudermüller also stood by his decision to cut costs to remain competitive, saying it provided a good basis for the Kamiet team.
A year ago, BASF unveiled plans to close plants, cut costs and cut about 2,600 jobs in Europe, mostly affecting its headquarters in Ludwigshafen, Germany.
In February, the company said it would cut annual costs at Ludwigshafen by another 1 billion euros ($1.1 billion).
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter, adjusted for one-off items, fell 5.3% to 2.7 billion euros ($2.9 billion), partly impacted by higher bonuses and reduction in sales of agrochemicals and surface treatments. and catalyst business.
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However, this is above the average analyst estimate of 2.57 billion, according to the consensus on the company’s website.
Sales fell about 12% to 17.6 billion euros in the first quarter as BASF felt the effects of price cuts across almost all segments, missing analysts’ forecasts of 18.6 billion euros.
BASF is in the midst of a major restructuring that will make businesses such as battery chemicals and agricultural pesticides more independent.
The company agreed to sell its energy business and continues to invest in China despite political tensions with the West as growth in its domestic European market lags behind other regions.
($1 = 0.9340 euros)