German chemicals giant BASF said Wednesday it expected to swing to a loss for 2020 due to the coronavirus pandemic but it still beat expectations as it recovered in the final quarter.
The Ludwigshafen-based company said that its full-year operating loss would be 191 million euros ($232 million) compared with a profit of 4.2 billion euros in 2019, based on preliminary figures.
The coronavirus outbreak has hit a swathe of industries in which BASF is a crucial part of the supply chain — from aviation to car manufacturing.
The 2020 loss was, however, ‘better than expected by analysts on average’, BASF said.
The company blamed writedowns and ‘provisions for restructuring’ in the third quarter, when it slumped to a to a 2.6 billion euro operating loss, for its full-year figures.
BASF said in July it would shed 2,000 jobs by the end of 2022 that would save it 200 million euros annually by 2023.
Yet the company rebounded in the final three months of the year, as operating profit rose more than 60 per cent year-on-year to 932 million euros.
The company’s performance materials, petrochemicals and performance chemicals divisions exceeded expectations, BASF said.
The upturn in the car industry and rebound in the Chinese economy towards the end of the year also helped BASF’s recovery in the period.
Sales across the year reached 59.1 billion euros, only slightly down on 2019’s 59.3 billion euros, but above the company’s own expectations of 57-58 billion euros.
In February 2020, before coronavirus restrictions closed factories and businesses, BASF had hoped to boost its sales to 60-63 billion euros.
Shares in BASF at 0930 GMT climbed 2.0 per cent in Frankfurt compared with a rise of 0.6 per cent in the DAX index as a whole.
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