BASF’s financial performance in 2023 fell below analysts’ estimates as cost-cutting efforts could not offset lower sales margins, the company said on Jan. 19.
The company’s expected income from operations before special items (EBIT) of €3.8 billion ($4.1 million) in 2023 is below the range of €4 billion ($4.4 billion) to €4.4 billion ($4.8 billion) forecasted by BASF and below the average analyst estimates of €3.9 billion ($4.2 billion) for 2023.
EBIT in 2022 was €6.9 billion, or $7.5 billion.
The decrease compared with the prior year is related to lower margins, which could not be offset by fixed cost reductions, the company said. Last year, the company said it was cutting 2,600 jobs cuts across Europe and closing several plants to remain competitive amid rising energy prices and increasing regulations.
In the chemicals segment, EBIT before special items in 2023 fell considerably short of average analyst estimates, partly due to unplanned plant shutdowns.
Bloomberg News noted that BASF is one of several German chemical manufacturers struggling with rising energy prices amid the Russia/Ukraine war.
The company’s results show “that the start into 2024 will be difficult,” said Stifel analyst Andreas Heine told Bloomberg News.
BASF announced a number of restructuring moves in late 2023, including the decision to split the company into three divisions and name current Asia head Markus Kamieth its new CEO.
Kamieth will assume the role held by Martin Brudermüller, whose contract expires in April. Brudermüller has held the post since 2018.
