BASF Stock: Earnings Slump Despite Maintained Outlook

BASF, the chemical giant, has reported disappointing first-quarter results, signaling continued challenges in the global industrial sector. The company's revenue slightly declined to €17.4 billion, falling short of market expectations of €17.6 billion. More concerning was the substantial drop in net profit, which plummeted to €808 million from €1.37 billion in the same period last year. This significant decline reflects ongoing difficulties in key segments, including Agricultural Solutions, Chemicals, and Nutrition Care, where sales volumes decreased. Additionally, heightened competition across nearly all business units pressured prices downward, with only positive currency effects from the US dollar providing partial relief.

Management Maintains Confidence Amid Headwinds

Despite these underwhelming results, BASF's leadership has reaffirmed its annual guidance, maintaining its forecast for EBITDA before special items between €8.0 and €8.4 billion for 2025. The company also plans to continue shareholder-friendly policies, proposing a dividend of €2.25 per share at its annual meeting. Furthermore, management has committed to returning at least €12 billion to shareholders between 2025 and 2028 through dividends and share buybacks. This steadfast approach comes amid a comprehensive corporate restructuring aimed at improving profitability in response to high energy costs and weak economic conditions, potentially including additional plant closures.

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Source StockWorld