BASF released preliminary data on the business situation in the second quarter of 2020 on July 10.
In the second quarter of 2020, sales were 12.680 billion euros (second quarter of 2019: 14.478 billion euros), a decrease of 12.4%. The pre-interest and tax income excluding special projects, which reflects the operation of the BASF Group in the second quarter of 2020, is 226 million euros, which is higher than market expectations and within the scope of BASF's expectations, but it has dropped significantly from the same period last year (second in 2019) Quarter: 995 million euros).
The decline in EBIT before special items is due to a significant decrease in revenue from the business areas of materials, surface treatment technology, chemicals and industrial solutions compared to the same period in 2019. This is mainly due to the decline in demand of the company's most important customer industry, the automotive industry.
Profits in the nutrition and care business area and "other" business areas increased year-on-year, which offset some of the decline in revenue.
Revenues in the agricultural solutions business area remained unchanged from the second quarter of 2019.
The BASF Group’s pre-interest and tax earnings for the second quarter of 2020 are expected to be 59 million euros, significantly lower than the same period last year (in the second quarter of 2019, it was 507 million euros).
The BASF Group's net income for the second quarter of 2020 is expected to be negative 878 million euros. The main reason is the impairment of equity investments in Wintershall Dea (the impairment has no cash flow effect). This data will be significantly lower than current analyst expectations and the same period last year (2019 second quarter: 5.954 billion euros). The impairment of approximately 800 million euros in equity is due to lower oil and gas forecast prices and changes in reserve estimates. The net income for the same period last year included the book revenue of 5.684 billion euros after the merger of Wintershall and DEA on May 1, 2019.
