MOSCOW (MRC) -- BASF said Thursday it will not be able to meet full-year sales and earnings guidance issued on 28 February and withdrew its outlook in advance of its first-quarter earnings report on Friday, reported Chemweek.
"It is currently impossible to reliably estimate both the length and the further spread of the coronavirus pandemic, as well as future measures to contain it," BASF said. "Consequently, concrete statements on the future development of sales and earnings cannot be made at present."
BASF has previously forecast 2020 revenues of EUR60–EUR63 billion, up 3.7% year-on-year (YOY), and EBIT before special items of EUR4.2–EUR4.8 billion, essentially flat with 2019 results. BASF's underlying assumptions for the economy at the time were global GDP growth of 2% and chemical production growth of 1.2%. IHS Markit's current forecast calls for a 3% decrease in global GDP this year.
BASF also announced yesterday that it would leave its dividend for the 2019 business year unchanged. The company’s board today proposed a dividend of EUR3.30/share for approval at the annual shareholders meeting of BASF SE, which will be held 18 June.
As MRC informed earlier, BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
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. BASF generated sales of around EUR63 billion in 2018.
MRC