BERLIN, Feb. 26 (Xinhua) -- German chemical giant BASF's net profits fell nearly 23 percent year on year to 4.7 billion euros (5.34 billion U.S. dollars) in 2018, while its turnover increased slightly by 2 percent to 62.7 billion euros, the company announced on Tuesday.
BASF reported particularly weak business figures for the fourth quarter of 2018. While turnover remained stable, net profits plummeted by over three quarters to 348 million euros.
The decline in net profits was particularly due to lower demand in BASF's largest customer market, the automotive sector. However, BASF CEO Martin Brudermueller assured that "for the automotive industry, we anticipate a slight recovery after lower production in the previous year".
Low water levels on the river Rhine, one of Germany's major transport routes, also contributed to the weaker business figures. The supply of raw materials by inland shipping to BASF's main plant in Ludwigshafen, the world's largest chemical site, almost came to a complete standstill.
As a result, BASF had to cut production in the Ludwigshafen-based plant during large parts of the third and fourth quarters of 2018, which led to costs of around 250 million euros.
For the second half of 2018, BASF reported an "economic slowdown," in particular as demand from Chinese customers "declined significantly."
Additionally, uncertainties increased globally and "many market participants therefore acted very cautiously," according to BASF.
Growth of BASF's chemical production is set to remain at 2.7 percent in 2019. CEO Brudermueller added that "we expect growth in our customer industries to continue."
In its outlook for 2019, BASF expects trade conflicts between the United States and its trading partners to ease, and that Brexit would "occur without wider economic repercussions."
Shares of BASF rose by over 3.5 percent and were the winners on Germany's DAX stock market at the start of trading on Tuesday. The same day, BASF also announced plans to raise its dividends from 3.10 euros to 3.20 euros per share for fiscal year 2018.
