BERLIN, July 9 (Xinhua) -- German chemical giant BASF cut its business outlook for 2019 and is expecting profits and turnover to decline in the current year, the company has announced on Monday evening local time.
Following the profit warning of BASF, shares of the German chemical company fell by around 5 percent and were among the biggest losers in Germany's stock index DAX on Tuesday.
The firm are anticipating earnings before interest and taxes (EBIT) to decline by up to 30 percent compared to last year while the company's turnover is set to "decline slightly", according to BASF, one of the largest chemical companies in the world.
In February, BASF had still expected turnover to increase by up to five percent with an increase in EBIT increase of up to 10 percent.
It noted that the "significantly weaker-than-expected industrial production negatively impacted volumes and margin development at BASF".
The downturn in growth in the global automotive industry would have been "particularly strong" as production in this branch declined by around 6 percent in the first half of 2019, according to BASF.
In addition to a stagnating global industrial production, the "weak development" of the North American agricultural sector imposed an "additional burden" to BASF, the company said. Lower yield prospects for farmers in North America due to poor weather conditions led to lower demand for BASF's pesticide products.
The German chemical industry in general is suffering from international trade conflicts, a slowing global economy and weak industrial development in parts of Europe, the German chemical industry association (VCI) announced last week.
The VCI cut its industry outlook for 2019 and is expecting production of Germany's chemical companies to decline by 4 percent and total turnover of the sector to fall by 3 percent.
Besides trade conflicts, the risk of a further slowdown of world trade due to military conflicts in the Middle East would be "on the rise", said Hans Van Bylen, VCI president and also added that "the danger of a hard Brexit is still not averted".