BASF reported second quarter earnings that exceeded analysts' forecasts. The chemical giant registered Sales growth of 56 percent to €19.8 billion during the quarter. BASF has EBIT before special items increased significantly to €2.4 billion and cash flows from operating activities of €2.5 billion, up €295 million over level of prior-year quarte. r

BASF announced earnings per share of €2.03 on revenue of €19.75B. Analysts polled by Investing.com anticipated EPS of €1.72 on revenue of €17.94B.

“The strong growth momentum of the previous two quarters has continued: Thanks to higher prices and volumes, we can present very strong second-quarter results today,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE, who presented the second-quarter results together with Chief Financial Officer Dr. Hans-Ulrich Engel. On July 9, BASF already published preliminary figures for this quarter and raised its outlook for the full year 2021.

“We achieved volumes growth and price increases across all regions and all segments compared with the second quarter of 2020,” said Brudermüller.

Sales increased by €7.1 billion compared with the second quarter of 2020 to €19.8 billion. This sales growth of 56 percent was largely attributable to higher prices and volumes in all segments. Price levels in the Surface Technologies, Chemicals and Materials segments in particular increased, while volumes grew primarily in the Surface Technologies, Materials and Industrial Solutions segments. Negative currency effects had an offsetting impact.

Income from operations (EBIT) before special items in the second quarter of 2021 was considerably higher than the pre-pandemic level of €1 billion in the second quarter of 2019 and increased compared with the prior-year quarter by more than €2 billion to reach €2.4 billion. This was mainly attributable to the considerable rise in EBIT before special items in the Chemicals and Materials segments. The Surface Technologies and Industrial Solutions segments also increased earnings considerably. By contrast, EBIT before special items in Other and in the Nutrition & Care and Agricultural Solutions segments decreased considerably. EBIT increased from €59 million in the second quarter of 2020 to €2.3 billion. Income from operations before depreciation, amortization and special items (EBITDA before special items) increased by €2.0 billion compared with the second quarter of 2020 to €3.2 billion. EBITDA grew by €2.1 billion to reach €3.2 billion.

“Considerably higher earnings in our upstream businesses due to higher prices and volumes were the main driver for the strong increase in earnings overall,” said Brudermüller. “In our downstream segments, we also managed to increase volumes and prices based on strong demand.”

Sales in the chemicals segment rose considerably by 91 percent compared with the prior-year quarter to €3.4 billion. The sales increase was primarily due to significantly higher price levels, owing largely to strong demand alongside lower product availability. EBIT before special items of €990 million was considerably above the level of the second quarter of 2020. This was largely attributable to considerably higher EBIT before special items in the Petrochemicals division. EBIT before special items also rose considerably in the Intermediates division.

BASF Group outlook for 2021

The assessment of the global economic environment in 2021 was adjusted as follows (previous forecast from the BASF Quarterly Statement Q1 2021 in parentheses):

• Growth in gross domestic product: +5.5 percent (+5.0 percent)
• Growth in industrial production: +6.5 percent (+5.0 percent)
• Growth in chemical production: +6.5 percent (+5.0 percent)
• Average euro/dollar exchange rate of $1.20 per euro ($1.18 per euro)
• Average annual oil price (Brent crude) of $65 per barrel