(Feb 27): BASF SE warned it will need to make more savings as the German manufacturer confronts a prolonged downturn in the chemicals market.
The company targets “significant” workforce reductions at its internal IT division that employs around 8,500 people, it said on Friday. Its current cost-cutting push isn’t sufficient to counter persistently weak momentum in most major markets, BASF’s finance chief said.
“We know exactly that with our programmes so far, we will not do the full trick,” Chief financial officer Dirk Elvermann said on a call with analysts. The shares fell the most since April.
BASF has been weathering a slump in Europe’s chemicals industry as the market is awash with overcapacity. To defend profitability, the company has carved out several business units and cut jobs in Ludwigshafen, Germany, the world’s largest integrated chemical complex.
The BASF industrial plant in Ludwigshafen, Germany, the world’s largest integrated chemical complex.
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While China has developed positively this year, volume development in the remaining regions has been weak, chief executive officer Markus Kamieth said. He warned that BASF’s first-quarter results may decline from a year earlier due to negative currency exchange effects and factory maintenance that requires downtime.
BASF shares fell as much as 5.4% in Frankfurt. The stock, which gained in recent months amid optimism around a potential economic recovery and softer European emissions rules, is little changed over the past year.
For 2026, the manufacturer is forecasting roughly flat operating earnings. BASF also upped its target for annual cost savings to €2.3 billion by the end of this year, from €2.1 billion previously.
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“The guidance confirmed that low cycle conditions will persist for at least the first part of the year,” Bernstein analyst James Hooper said in a note.
Union representatives are organising protests in Berlin on Friday in response to the planned cuts at the internal IT division, which come as the company sets up a new hub in India.
Europe’s biggest chemicals maker has been streamlining its portfolio to focus on its most profitable businesses. The company has hived off its coatings division and plans to list its Agricultural Solutions business in Frankfurt by 2027. The division is on track to reach IPO-readiness next year, the CEO said.
This week, BASF announced it’s selling 4,400 apartments it owns to focus on the core business and bolster its balance sheet — a move a local union compared to selling the firm’s crown jewels.
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