Annual profits miss targets at BASF

German chemical giant BASF Group reported annual sales and earnings well below analyst expectations on Friday.

Releasing preliminary figures for 2023, BASF said annual sales were €68.9bn, below both internal and external forecasts for €73bn to €76bn. Sales in 2022 were €87.3bn.

Expected income from operations before special items fell from €6.9bn to €3.8bn, less than the €4bn to €4.4bn expected. BASF said the decrease was due to "sales-related lower margins, which could not be offset by the achieved fixed cost reduction".

Net income, however, was €225m, a notable improvement on 2022's net loss of €627m, when the firm was hit by non-cash impairments relating to its exit from Russia.

BASF’s energy intensive operations have left it grappling with higher costs and falling earnings. Demand has also softened.

Last year it launched a major cost cutting programme, and in December announced that Markus Kamieth would take over as chief executive from outgoing incumbent Martin Brudermuller in April.

Kamieth currently oversees BASF’s China operations, a key market for the company.

BASF, the world’s largest chemicals company, will publish final full-year figures on 23 February.