German chemical giant BASF SE (BASFY.PK, BFA.L) Friday reported a decline in first-quarter profit, despite about 5 percent growth in sales. Results reflected lower sales volumes in Construction Chemicals division due to adverse weather conditions and earnings for the segment were down, as a result of lower contribution from Catalysts division.
Chemicals segment posted a decline in sales, mostly due to lower sales volumes, mainly attributable to plant shutdowns in Petrochemicals division.
The company saw high earnings from Agricultural Solutions segment. According to the firm, quarterly sales volumes grew mainly due to intensified demand for crop protection products and increased volumes in the Oil & Gas segment. Sales rose significantly in Agricultural Solutions segment, with a very good start to the season in Europe and North America, the company said.
Despite lower crude oil prices, sales grew considerably in the Oil & Gas segment. Sales in Functional Materials & Solutions segment were in line with the prior-year quarter.
At the annual shareholders' meeting, Kurt Bock, chairman of the board of executive directors stated, "We have had a solid start to 2013. In particular, our business with crop protection products continued to be very successful."
In the first quarter, the company's net income declined to 1.45 billion euros or 1.57 euros per share from 1.70 billion euros or 1.85 euros per share in the previous year. Adjusted for special items and amortization of intangible assets, earnings per share were 1.67 euros for the recent period.
Income from operations or EBIT dropped 16.5 percent year-over-year to 2.17 billion euros, reflecting 645 million euros of special income from divestiture of fertilizer business recorded in the prior-year quarter.
EBIT before special items advanced 10.1 percent to 2.21 billion euros, due to considerable earnings improvement in the Chemicals segment, with higher margins.
Sales for the quarter grew 4.8 percent to 19.74 billion euros.
For 2013, BASF still targets to exceed the 2012 levels in sales and EBIT before special items. The company said its expectations for the global economic environment in 2013 remain unchanged.
The board has also proposed an increase in dividend for the 2012 business year by 0.10 euros to 2.60 euros per share.
On Frankfurt's Xetra, BASF shares are currently trading at 70.89 euros, up 0.89 euros or 1.27 percent.
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