Brazil Woes Hit BASF Quarterly Sales

BASF’s Agricultural Solutions business saw sales drop 6% in the third quarter, due to declining prices and volumes in Brazil.

Sales in the unit fell to $1.16 billion (€987 million) from a year ago. Negative currency effects put additional pressure on sales development. BASF said it was able to slightly increase overall volumes. EBIT before special items decreased by $89 million (€76 million) to $25 million (€21 million). This was primarily due to the difficult market situation in Brazil. Earnings were also negatively impacted by the shutdowns of the production facilities in Beaumont, Texas, and Manatí, Puerto Rico, because of the hurricanes. Fixed costs were on a level with the prior-year quarter.

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Sales in North America were up slightly on the prior-year quarter. BASF increased herbicide volumes with Engenia® and fungicide volumes with Xemium®. Negative currency effects slowed sales growth.

Business in the region South America, Africa, Middle East continued to be dominated by the difficult situation in Brazil; sales decreased considerably. With the market environment deteriorating, farmers’ economic situation remained strained and competitive pressure was high. This pushed down prices and sales volumes, especially of fungicides and insecticides. Negative currency effects also contributed to the decline in sales.

We increased sales considerably in Asia, mainly due to volumes growth with fungicide innovations in India as well as higher volumes in South Korea and Southeast Asia.

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Income from operations before special items declined considerably year-on-year. This was primarily due to the difficult market situation in Brazil. Earnings were also negatively impacted by the shutdowns of our production facilities in Beaumont, Texas, and Manatí, Puerto Rico, because of the hurricanes. Fixed costs were on a level with the prior-year quarter.

Source: BASF

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