BASF Group has released preliminary figures for the second quarter of 2021 with sales increased by 55.8 per cent during the period to €19.753 billion ($23.44 billion), against €12.68 billion ($15.04 billion) in the corresponding period in 2020.
The increase was driven by higher prices (+35 per cent) and volumes (+28 per cent); negative currency effects (-7 per cent) had an offsetting effect. The average analyst estimates BASF Group’s sales in the second quarter of 2021 amounted to €17.157 billion ($20.36 billion).
In the second quarter of 2021, the operating business of BASF Group has been able to maintain the strong momentum since the fourth quarter of 2020. Earnings before interest and taxes (EBIT) before special items is expected to amount to €2.355 billion ($2.78 billion), a considerable increase compared with the second quarter of the year prior, which was weak due to the pandemic (Q2 2020: €226 million – $268 million). At €1.965 billion ($2.33 billion), the average analyst estimates for EBIT before special items of BASF Group in Q2/2021 are considerably below this figure.
The chemicals, materials and industrial solutions segments considerably exceeded average analyst estimates for EBIT before special items in Q2/2021. EBIT before special items was slightly below analyst consensus in the surface technologies segment and significantly below average analyst estimates in the agricultural solutions and nutrition and care segments. In the “other” category, EBIT before special items was on the level of average analyst estimates.
BASF Group’s EBIT is expected to be €2.316 billion ($2.75 billion) in Q2/2021, considerably above the figure for the prior-year quarter, which was weak due to the pandemic (Q2/2020: €59 million – $70 million). EBIT in the second quarter of 2021 includes a preliminary disposal gain of a mid-double-digit million-euro amount from the sale of the pigments business. The analyst consensus for EBIT in Q2/2021 is €1.929 billion ($2.28 million).
Outlook 2021 for the BASF Group
Based on the strong business development in the first half of 2021 (sales reached €39.153 billion or $46.47 billion; EBIT before special items reached €4.676 billion – $5.55 billion), BASF is increasing its 2021 outlook for sales and EBIT before special items. For the full year 2021, BASF Group now expects sales of €74-77 billion ($87.8-91.4 billion) compared with the previous outlook for 2021 at €68-71 billion ($80.7-84.3 billion) while analyst consensus for 2021 was €68.654 billion ($81.49 billion). EBIT before special items is now anticipated to reach €7-7.5 billion ($8.3-8.9 billion) in 2021 compared with the previous outlook was €5-5.8 billion ($5.9-6.8 billion). The considerably increased earnings expectations in the chemicals and materials segments are the main reason for the increased forecast for 2021.
This outlook is based on the following assumptions regarding the global economic environment in 2021. Accordingly, growth in GDP is forecast to increase by 5.5 per cent (previously: 5.0 per cent); growth in industrial production would reach 6.5 per cent (previously: 5.0 per cent); growth in chemical production would be 6.5 per cent (previously: 5.0 per cent). The calculations were made with an average dollar/euro exchange rate of $1.20 (previously: $1.18) and average annual oil price (Brent crude) of $65 per barrel (previously: $60 per barrel).
BASF’s forecast assumes that there will be no severe restrictions on economic activity due to measures to combat the COVID-19 pandemic in the second half of 2021.