Basf in third quarter 2024: Ebitda slightly up, sales essentially stable

Thanks to significantly higher contributions from the core businesses, Basf’S Ebitda before special items (income from operations before depreciation, amortization and special items) increased in the third quarter by 77 million euros compared to the same period last year, to 1.6 billion euros. “The positive earnings momentum in our core businesses was already visible in the first half of 2024 and continued in the third quarter, driven by higher volumes and margins,” said Markus Kamieth (in the picture below), Chairman of the Board of Executive Directors of Basf. This increase was partially offset by a considerable earnings decline in the standalone businesses as well as in other areas. Under its new strategy announced in late September 2024, Basf differentiates between its core businesses (Chemicals, Materials, Industrial Solutions and Nutrition & Care) and the standalone businesses that serve distinct industries. The standalone businesses are reported in the Surface Technologies and Agricultural Solutions segments.

At 15.7 billion euros, sales were on a level with the prior-year period. Volume growth in almost all segments compared with the third quarter of 2023 had a positive impact on sales performance. Volumes increased in the core businesses as well as in Agricultural Solutions. Only the Surface Technologies segment recorded a decline in volumes in the Catalysts division due to weak demand in the automotive market. Negative currency effects, mainly relating to the Argentine peso and Brazilian real, burdened sales. Lower prices in nearly all segments, particularly for precious and base metals in the Surface Technologies segment, also hindered sales performance.

Net income was 287 million euros (prior-year quarter: -249 million euros). This significant increase resulted mainly from higher net income from shareholdings, primarily due to special income of 398 million euros in connection with the transfer of Wintershall Dea assets to Harbour Energy.

Chief Financial Officer Dirk Elvermann provided an update on the cost savings programs currently underway: “We are on track to achieve the targeted 2.1 billion euros annual cost savings by the end of 2026. The implementation of the cost savings programs announced in February 2023 is in full swing.” As of the end of September 2024, Basf has already achieved a cost reduction run rate of around 800 million euros. The associated one-time costs were around 500 million euros. By the end of this year, the company expects to achieve a cost reduction run rate of more than 800 million euros, with associated one-time costs of around 550 million euros. Basf is also moving forward as planned with the additional cost savings program launched in 2024 that focuses on improving the competitiveness of the Ludwigshafen site by the end of 2026.

With the current situation, the company expects to close 2024 with an Ebitda, again before special items, of between 8 and 8.6 billion euros.