BASF Agricultural Solutions Sales Rise on Europe, North America
German chemical giant BASF saw higher sales in its Agricultural Solutions business in the fourth quarter, and expects the business to contribute a larger amount to the company in 2015.
In the fourth quarter, Agricultural Solutions — which encompasses crop protection products and seeds — sales increased by 25% to $1.4 billion, mainly due to higher sales volumes. EBIT before special items grew by $71 million to $157 million.
Full-year sales were $6.9 billion and exceeded the level of 2013 by 4% despite negative currency effects. This was largely due to robust business in Europe and North America as well as greater demand for fungicides and herbicides. Yet the drop in prices for agricultural products that resulted from the previous year’s successful harvests put a considerable strain on the business, BASF said. It noted that negative currency effects, margin declines due to a less favorable product mix, and higher expenditures for research and development as well as for production and distribution all led to a decrease in EBIT before special items of $144 million to $1.4 billion. “BASF nevertheless achieved the second-best full-year earnings in the Agricultural Solutions segment to date,” it said.
Speaking about the company as a whole, Chairman Dr. Kurt Bock said, “The outlook for the 2015 business year is subject to significant uncertainty. Oil and raw material prices are volatile, as are currencies; the emerging markets are growing more slowly; and the global economy is being dampened by geopolitical conflict. For 2015, we nevertheless anticipate somewhat stronger growth in the global economy, industrial production and the chemical industry than in 2014.” One reason for this is the lower oil price. BASF expects considerably larger contributions from Performance Products, Functional Materials & Solutions and Agricultural Solutions in 2015.