Cost-cutting, oil and gas lift Q3 profits at BASF
FRANKFURT, Germany (AP) — German chemicals firm BASF said Friday that its third-quarter net profit rose 18.5 percent, helped by a better performance from its key business making industrial materials that other companies turn into finished goods.
Net income was 1.096 billion euros ($1.512 billion), up from 925 billion euros in the same quarter a year ago. Revenues rose 1.5 percent to 17.73 billion euros.
BASF SE, which is based in Ludwigshafen, also pointed to cost reductions in two key areas. It saw reduced fixed costs at its specialty chemicals business and had lower deductions to earnings from executive stock compensation. The company’s personnel costs fell 2.1 percent from a year ago, even as the number of employees rose slightly to 112,617.
Expenses in its “other” category, where the long-term stock incentive program is recorded, fell to 97 million euros from 356 million in the same quarter a year ago.
BASF called Friday’s results “robust” and credited stronger earnings from its functional materials division as one key factor. Earnings at the division rose 17.4 percent to 405 million euros, measured before financial factors such as interest, taxes and depreciation. The division makes a wide range of industrial raw materials including catalysts, plastics, coatings and ingredients for batteries and concrete. Those products are used by customer companies in the auto, electrical and construction industries.
The company’s oil and gas division was another strong contributor to the bottom line. Earnings there rose 13.3 percent to 726 million euros.