FRANKFURT ― BASF’s profit slipped in the third quarter, the German chemicals giant said on Wednesday, but it still beat expectations due to higher chemical sales volumes and strong precious metal trading, sending shares higher in early trade.
Third-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 4.8 percent to 1.54 billion euros ($1.80 billion), when including the coatings business that it agreed to sell this month.
That slightly surpassed average market expectations for 1.5 billion euros, based on an analyst consensus posted on the group’s website.
Market remains challenging, customers cautious
Shares were up 3 percent at a three-week high at 0907 GMT (5:07 p.m. in Manila), also buoyed by an announcement late on Tuesday that BASF would bring forward a previously announced share buyback program thanks to divestment proceeds.
“This is sooner than we and likely the market had expected,” JPMorgan analysts said in a research note.
The unexpected earnings strength was partly driven by BASF’s profitable trading in precious metals that go into its catalytic converters, they added.
BASF cautioned that overall market dynamics remained challenging and that it had to mark down prices across areas such as basic chemicals, materials for industrial use and agricultural products. Only its Surface Technologies and Nutrition & Care units were able to charge higher prices.
“Customer buying behavior in almost all industries and regions remained cautious,” said CEO Markus Kamieth.
BASF adjusted its full-year guidance to account for the coatings unit that is to be sold, predicting EBITDA before special items of between 6.7 billion and 7.1 billion euros.
Kamieth has embarked on a push to exit or separate businesses that are not closely integrated and physically connected within the group’s sprawling chemical plants across the globe.
BASF moved this month to sell a 60 percent stake in its coatings business to private equity firm Carlyle and the Qatar Investment Authority, for a 5.8 billion euro cash payment.
