Industry News

Dow and BASF Report Lower Q1 Sales

April 29, 2024

Companies remain optimistic with signs of recovery in several markets.

Despite reporting lower sales, Dow and BASF said their first-quarter results indicate a potential rebound in the chemical sector.

For BASF, sales fell €2.4 billion ($2.6 billion) to €17.6 billion ($18.9 billion) in the quarter.

This decline was mainly driven by a significant drop in raw-materials and energy prices in most segments in addition to lower precious metals prices in the surface technologies market, the company said in an earnings statement.

Negative currency effects, largely relating to the Chinese renminbi and the U.S. dollar also impacted sales performance in the chemicals segment, the company said.

“This was due in particular to our customers increasing their inventories and lower imports by competitors to Europe as a result of the conflict in the Red Sea,” the company said in its quarterly statement.

BASF’s income from operations before depreciation, amortization, or EBITDA, before special items reached €2.7 billion ($2.9 billion), 5.7% higher than the average of analysts’ estimates, the company reported.

Following the annual shareholders meeting, Markus Kamieth took over as CEO for Martin Brudermüller. The company announced the management change in December.

The company said its projections for 2024 remain unchanged, including EBITDA before special items of between €8 billion ($8.6 billion) and €8.6 billion ($9.2 billion), up from €7.7 billion ($8.3 billion).

Dow’s net sales were $10.8 billion, down 9% versus the year-ago period. Operating EBIT was $605 million, a decrease of $37 million compared to the year-ago period, primarily due to lower integrated margins, the company said.

However, Dow CEO Jim Fitterling said the company’s performance indicates improvement in the sector.

“In the first quarter, we captured improving demand, maintained pricing and benefited from lower feedstock and energy costs,” he said. “The strength of our cost-advantaged positions around the world led to higher operating rates. As a result, Team Dow delivered volume growth and margin expansion sequentially across our diverse portfolio. We also delivered on our capital allocation priorities, including returning $693 million in cash to shareholders during the quarter.”

In a podcast interview with Bloomberg News, Fitterling said the company is experiencing strong demand growth in several sectors, including automotive, industrial electronics and packaging.

He noted that chemical shipments in the first quarter were up 4% year-over-year. Growth for chemicals used in housing construction, including paint and coatings, remains slow, Fitterling told Bloomberg News. He noted that interest rate cuts could help that segment grow.

About the Author

Jonathan Katz | Executive Editor

Jonathan Katz, executive editor, brings nearly two decades of experience as a B2B journalist to Chemical Processing magazine. He has expertise on a wide range of industrial topics. Jon previously served as the managing editor for IndustryWeek magazine and, most recently, as a freelance writer specializing in content marketing for the manufacturing sector.

His knowledge areas include industrial safety, environmental compliance/sustainability, lean manufacturing/continuous improvement, Industry 4.0/automation and many other topics of interest to the Chemical Processing audience.

When he’s not working, Jon enjoys fishing, hiking and music, including a small but growing vinyl collection.

Jon resides in the Cleveland, Ohio, area.