Sales in BASF’s Agricultural Solutions segment rose by 4% in the fourth quarter to $1.7 billion (€1.3 billion), boosted by significantly higher volumes that more than compensated for declining prices and negative currency effects.
Compared with the same quarter of the previous year, EBIT before special items grew by 162%, rising to $253 million (€207 million).
Full-year sales in the Agricultural Solutions segment rose by $156 million (€127 million) to $7 billion (€5.7 billion) as a result of higher sales volumes. In an ongoing difficult market environment for crop protection products, sales growth was negatively impacted by price declines, especially in South America, and negative currency effects. EBIT before special items was $1.2 billion (€1 billion), down $66 million (€54 million) on the prior-year figure. The slight decline was mainly due to the lower average margins from a different product mix and the difficult market situation in Brazil. Earnings were also negatively impacted by the shutdowns of production facilities in Beaumont, Texas, and Manatí, Puerto Rico, because of the hurricanes. Fixed costs rose slightly.
In 2018, the Agricultural Solutions segment will be strengthened with the acquisition of significant parts of Bayer’s seed and herbicide businesses. Says Chairman Kurt Bock: “These will be an excellent complement to our well-established and successful crop protection business and our biotechnology activities. And we will be entering into the seed business with proprietary assets in key agricultural markets, which will also allow us to more quickly implement the results of our seed research.”
For the company as a whole, BASF expects the global economy and chemical production in 2018 to grow at roughly the same pace as in 2017. Further growth is expected in all regions and BASF anticipates a continuation of the recovery already underway in Brazil and Russia. In addition to these generally positive baseline conditions, however, BASF also sees increased market volatility. Furthermore, the U.S. dollar is having a negative impact on sales and earnings.