BERLIN (Reuters) -Germany’s top chemical maker BASF reported a drop in annual earnings below estimates on Friday, weighed by impairments on battery materials in its surface technologies unit and restructuring costs.
The surface technologies unit produces materials for electric vehicle (EV) batteries, especially for the German automotive sector, which is now struggling against weak demand for EVs and competition from China.
According to preliminary figures, 2024 earnings before interest and taxes fell to 2 billion euros ($2.10 billion), missing Vara’s consensus of 3.2 billion euros, also falling below the 2023 figure.
However, the earnings, when adjusted for one-offs, were roughly in line with the guidance released in October on the back of bleak outlook for the automotive and agricultural sectors, which BASF supplies.
Earnings before interest, taxes, depreciation, amortization, and special items came at 7.9 billion euros, slightly below the lower range of the 2024 guidance, due to a weak performance in the chemical division in the fourth quarter.
The German industrial heavyweight is also undergoing a massive restructuring program to cut costs by more than 2 billion euros annually in Europe, as the industrial outlook for Germany worsens.
German chemical lobby VCI saw the 2024 sector growth only at 2%, due to political turmoil in the country and a stagnant economy weighed by one of the highest energy prices in Europe, especially hitting the chemical makers who need large amounts of energy for their production.
($1 = 0.9513 euros)
(Reporting by Andrey Sychev, Editing by Louise Heavens)
