BASF, the world’s largest chemicals company, announced that profits fell sharply last year on weak chemical demand and higher taxes. The company does say, though, that expected sales and earnings to increase in 2013.
BASF said in a statement that its net profit dipped 21.2% to $6.4 billion in 2012.The company attributes the drop to “significantly higher taxes” on increased earnings in its oil and gas division.
In addition, gains from the sale of the group’s shares in fertilizer maker K+S in 2011 had been “predominantly tax-free,” it explained, while 2012 did not offer the same exemptions.
While BASF marked gains in its oil, gas and agricultural divisions, development in the chemicals side was weaker in 2012 compared to 2011 explained Kurt Bock, chief executive.
Underlying profit, as measured by earnings before interest and tax and special items, rose by 5.1% and sales grew by 7.1%.
Looking ahead, Bock said BASF “aims to grow again in 2013 and exceed the 2012 levels in sales and earnings before taxes and interests before special items.”
BASF also said it was unlikely to revive its share buyback program – once a mainstay of its shareholder payout strategy – this year because the cash would be better used to develop new products and to upgrade its plants and equipment.
In 2013, the company aims to increase sales and earnings in all operating segments, it added. It also proposed an annual dividend of 2.60 euros per share, more than the 2.57 euros expected by analysts.