BASF’s Agricultural Solutions business reported a 4% rise in quarterly sales on higher volumes and positive currency effects, as prices remained stable.
The Agricultural Solutions segment reported sales of $2.1 billion (€1.9 billion) despite a market environment that remained difficult. EBIT before special items declined by $63.1 (€58) million to $580 (€533) million compared with the strong first quarter of 2016. This was the result of lower average margins due to a different product mix. Fixed costs rose slightly, due in part to the startup of new plants.
Dr. Kurt Bock, Chairman and CEO, said on a conference call the company is also focusing increasingly on digital support for its agricultural customers.
“A few days ago, we signed an agreement to acquire the U.S. firm ZedX. Based in Bellefonte, Pennsylvania, ZedX is a leader in the development of big-data models for weather, harvests and crop protection which can further increase efficiency in agriculture,” Bock said.
Agricultural Solutions Results
“Sales in Europe nearly matched the level of the previous first quarter. We raised volumes considerably in central and eastern Europe, especially for herbicides. By contrast, western Europe posted a volumes decline,” BASF reported.
Positive currency effects and increased demand led to considerable sales growth in North America. Higher volumes arose primarily from solid business development for herbicides, especially the new solutions Engenia and Zidua PRO.
Sales rose considerably in Asia. This was largely attributable to higher volumes of fungicides due to earlier demand in China and the launch of the new Seltima formulation in India, as well as to solid sales volumes for herbicides in Indonesia and Australia.
In the region South America, Africa, Middle East, a considerable increase in sales was mainly the result of positive currency effects from the Brazilian real. Higher volumes of herbicides in Argentina and of insecticides in Africa and the Middle East contributed to the increase, while lower prices dampened sales development.