BASF raised sales in Q3 2013 by 1.5%

MOSCOW (MRC) -- The German chemical concern BASF, a leading global manufacturer of petrochemicals, raised sales in the third quarter of 2013 by 1.5% to around EUR17.7 billion despite significantly negative currency effects, according to the company's press release.

This growth was mainly the result of increased volumes, particularly in the Oil & Gas segment. Income from operations (EBIT) before special items rose by EUR221 million to just under EUR1.7 billion.

"Our business performance was robust in the third quarter of 2013. The increase in earnings was largely due to higher contributions from the Functional Materials & Solutions and Performance Products segments in addition to lower charges in Other," said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE.

Income before taxes and minority interests grew by EUR287 million to EUR1.5 billion compared with the previous third quarter. Net income rose by EUR171 million to around EUR1.1 billion.

At EUR4.2 billion, sales in the Chemicals segment were 8% below the level of the third quarter of 2012. Reduced prices dampened sales, especially in the Monomers division. In addition to negative currency effects, lower volumes in all divisions contributed to this sales decrease.

Sales volumes increased in the Performance Products segment. Sales of EUR3.9 billion were just under the level of the previous year’s quarter, mostly due to currency effects.

In the Functional Materials & Solutions segment, sales rose by 3% to EUR4.4 billion compared with the prior third quarter. While the Catalysts and Performance Materials divisions were able to increase sales through higher volumes, sales declined in the Construction Chemicals and Coatings divisions.

In the Oil & Gas segment, sales were up 25% to EUR3.1 billion thanks primarily to increased volumes in the Natural Gas Trading business sector.

The company’s expectations for the global economic environment in 2013 remain unchanged: growth of gross domestic product - 2.0%; growth in industrial production - 2.7%; growth in chemical production - 3.1%.

As MRC informed earlier, BASF increased sales by 3% in the second quarter of 2013 to just under EUR18.4 billion thanks to higher sales volumes in all segments. Income from operations (EBIT) before special items decreased by 5% to around EUR1.8 billion. In the first half of 2013, sales reached around EUR38.1 billion, surpassing the level of the previous first half by 4%. EBIT before special items increased by 3% to more than EUR4 billion.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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MOSCOW (MRC) -- Zhenhai Refining & Chemical Co (ZRCC) shut a linear low density polyethylene (LLDPE) plant owing to technical issues, according to Apic-Online.

A Polymerupdate source in China informed that the plant was shut on October 28, 2013. The restart schedule for the plant could not be ascertained.

Located in Zhejiang province, China, the plant has a production capacity of 450,000 mt/year.

As MRC reported earlier, another Chinese producer Xuzhou Hiatian Petrochemical shut a polypropylene (PP) plant on 26 August. The duration of the closure could not be ascertained. The closure has been attributed to non-availability of feedstock propylene. Located in Jiangsu, China, the plant has a production capacity of 200,000 mt/year.
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MOSCOW (MRC) -- Henan Jiyuan Fangsheng is likely to restart a polyvinyl chloride (PVC) plant following maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the plant is likely to be restarted on October 29, 2013. It was shut for five days of maintenance turnaround.

Located in Henan province, China, the plant has a production capacity of 100,000 mt/year.

As MRC wrote previously, another Chinese petrochem producer Tianjin LG Dagu Chemical shut down an ethylene-based polyvinyl chloride (PVC) plant for one week of maintenance works on August 20, 2013. Located in Tianjin, China, the plant has a production capacity of 400,000 mt/year.

Tianjin LG Dagu Chemical Co., Ltd. (LG-DAGU), one of the domestic PVC producers, is a Sino-Korean joint venture company set up by LG Chemical, LG International Corporation from South Korea and Tianjin Dagu Chemical Co., Ltd., which was registered in Tianjin Economic & Technological Development Area in 1995 with total investment of USD150 million.
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MOSCOW (MRC) -- Production at Saudi Arabia's Yanbu National Petrochemical Co (Yansab) complex is expected to remain offline for a total of 12 days, as per Plastemart.

Operations were halted since the shutdown since 23 October, due to a technical problem with a water cooling network.

The olefins cracker will be unable to restart until the water system is fixed, Yansab said in a Saudi bourse statement. Other units at the complex are expected to restart before then.

Yansab estimated the financial loss due to the outage at around SR 90 mln (USD24 mln), which it said would be reflected in the fourth-quarter results.

As MRC wrote previously, Saudi Arabia's Yanbu National Petrochemical Co. has reported a doubling of its third-quarter net profit, attributing the rise to increased production and sales as well as higher prices for its products. Yansab made SR864.8 million (USD230.6 million) in the three-month period to 30 September, up from SR435.7 million during the same timeframe in 2012.

Yansab (Yanbu National Petrochemical Co.), a joint-stock company, is 51%-owned by petrochemical giant Saudi Basic Industries Corp (SABIC). Yansab produces 400,000 tonnes/year each of high density PE (HDPE), linear low density PE (LLDPE) and polypropylene (PP).
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MOSOCW (MRC) -- Linde AG (LIN), competing with Air Liquide SA (AI) to be the biggest industrial gases company, cut its outlook for profit this year as the strengthening euro sapped foreign earnings, said Businessweek.

Linde expects operating profit of "around" 4 billion euros (USD5.5 billion), rather than that figure being a minimum as envisaged earlier, the Munich-based company said today in a statement. Third-quarter operating profit climbed to 1.03 billion euros from 949 million euros a year earlier, exceeding the 990 million-euro estimate of 13 analysts in a Bloomberg survey. Revenue increased 5.4% to 4.3 billion euros.

"We have fared quite well," Chief Executive Officer Wolfgang Reitzle said in the statement. "Economic trends have been anything but dynamic and exchange rates have increasingly moved against us."

Reitzle has pushed Linde into new markets to reduce reliance on more cyclical products such as supplying oxygen and other gases to welders and steel plants. The USD3.8 billion acquisition of Clearwater, Florida-based Lincare doubled Linde’s North America gas sales, while it also bought the former home-care business of Air Products & Chemicals Inc. in January 2012. Reitzle, 64, will step down next May to be replaced by Wolfgang Buechele, currently CEO of Kermira Oyj.

Linde said its 2016 target of at least 5 billion euros in operating profit, defined as earnings before interest, taxes, depreciation and amortization, is dependent upon exchange rates remaining at a similar level to those when the target was set at the end of 2012. If they remain at current levels, they will reduce the figure by about 250 million euros. That also applies to a goal of return on capital employed of about 14% the same year.

As MRC wrote before, Linde Group has formed a joint venture with chemical company JSC KuibyshevAzot to build and operate a large ammonia plant at the Togliatti site in Russia's Samara region. Both partners signed an agreement to this effect on 27 May 2013. The deal will involve a total investment volume of around EUR 275 million. Both companies have an equal stake in the newly formed venture, Linde Nitrogen Togliatti.

The Linde Group is a world-leading gases and engineering company with around 62,000 employees in more than 100 countries worldwide. In the 2012 financial year, Linde generated revenue of EUR 15.280 bn. The strategy of the Group is geared towards long-term profitable growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment – in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development.
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