BERLIN, July 27 (Xinhua) -- BASF Group has witnessed an increase in its revenue during the second quarter (Q2) of 2018, figures published on Friday by the German chemical producer show.
Gross revenue was measured by BASF at 16.8 billion euros (19.5 billion U.S. dollars) in Q2, marking an increase of 3 percent over the same period last year. Quarterly earnings before interest and taxes (EBIT) at the Ludwigshafen-based company rose by 5 percent to 2.4 billion euros.
BASF attributed the development to rising sales prices across all of its divisions which offset adverse currency effects experienced in Q2. A strong performance of the Oil & Gas unit, in particular, hereby contributed to an increase in the company's half-year EBIT by 160 million euros to a total of 4.9 billion euros. Revenue was up by 307 million euros at 33.4 billion euros between January and June 2018.
By contrast, earnings at the Functional Materials & Solutions- and Chemicals divisions both fell in Q2 over the same period last year. BASF blamed the relative underperformance of the two units on higher fixed costs and lower margins due to a rise in raw material costs.
Looking ahead, BASF highlighted a growing risk of global trade conflicts as a potential threat to its business model. "Risks in the global economy have increased significantly in the course of the first half-year", chief executive officer (CEO) Martin Brudermueller warned. He added that BASF was consequently "monitoring developments and their potential implications for our business very carefully."
In spite of these risks, the DAX-listed company confirmed an earlier forecast for continued revenue and EBIT growth in the course of 2018. The company plans to finalize its 7.6-billion-euro acquisition of business units with combined revenue of 2.2 billion euros from German rival Bayer for 7.6 billion in August.
"We already look forward to welcoming around 4,500 new colleagues with their future-oriented and innovative work fields at BASF," Brudermueller said. The deal in which Bayer will shed several crop-science related divisions was a key condition set by international antitrust regulators to allow the Leverkusen-based company to complete its own fusion with U.S. agrichemical producer Monsanto.
Brudermueller further announced on Friday that BASF would open a brand-new integrated Verbund site in the southern Chinese province of Guangdong. BASF plans to complete the project in Guangdong by 2030 at a total cost of up to 10 billion dollars, subject to further negotiations with local authorities.
"A company like BASF which sets itself the goal to be the leading chemicals company must participate in this major growth market," Brudemueller argued.
BASF is the world's largest chemicals manufacturer by revenue, recording global sales worth 64.5 billion euros in 2017. The Ludwigshafen-based company employs a total of 115,000 staff across the world.
