BASF have again showed that they can maintain a good course, even in stormy economic weather. ‘We perform consistently thanks to our clear strategy for long-term success, as demonstrated by the good start in the first quarter of 2004’, said Dr Jürgen Hambrecht, chairman of the board of executive directors of BASF Aktiengesellschaft when commenting on the company’s first-quarter figures at the annual meeting on April 29, 2004.

Compared with the strong first quarter of 2003, sales increased by 2.5%. Sales growth was due to significantly higher volumes. Overall, price levels are still unsatisfactory, although prices were increased in individual product lines. Excluding negative currency effects, sales climbed 8.4%.

Compared with the same period in 2003, earnings improved in all segments with the exception of oil & gas. At €1.138 billion, income from operations (EBIT) before special items climbed 21% compared with the strong first quarter of 2003.

Successful restructuring measures continued

Thanks to successful restructuring measures, significant cost reductions were achieved, in particular in the chemicals, plastics and performance products segments.

Special items are related to restructuring measures that will be implemented in the further course of the year, for example NAFTA restructuring Phase II. EBIT after special items increased by over 10% to €1.038 billion.

The financial result was minus €60 million compared with minus €103 million in the first quarter of 2003. The interest result improved in particular as a result of the lower level of net debt. Income before taxes and minority interests increased by 17% to €978 million.

The tax rate remained at the previous year’s level of 44%. In the first quarter, income taxes for oil production that are non-compensable with German taxes were €138 million compared with €161 million in the first quarter of 2003.

Net income rose 17% to €515 million.

Cash provided by operating activities rose 8% to €963 million. The higher level of net income contributed to this increase.

Optimistic outlook for the full year 2004

‘The first three months of 2004 offer grounds for confidence, even though the first quarter is not generally representative of the further course of the year because of seasonally higher contributions from the agricultural products division and from the oil & gas segment’, said Hambrecht. BASF anticipate demand for their products to remain strong. ‘Driven by the dynamically growing economies in the Far East – especially in China – and by solid growth in north America, we are seeing synchronised growth in the global economy for the first time in years. All these factors are reflected in our order books. Europe, and Germany especially, is sadly lagging behind’, he continued.

Although Hambrecht expects a negative impact on business due to persistently high and volatile raw materials costs and a relatively weak dollar, he remains optimistic with regard to his prognosis for 2004 overall: ‘I expect that we will achieve slightly higher sales and increase EBIT before special items.’