BASF's Earnings in 2024 Are Poor: 1 Billion Euros Less than Expected

BASF, Germany's largest chemical manufacturer, reported lower-than-expected annual profits on the 24th due to impairment of battery materials in its surface technology division and restructuring costs.

The surface technology division produces battery materials for electric vehicles (EVs), especially for the German automotive industry, which is currently facing weak demand for electric vehicles and "competition from China."

According to preliminary data, earnings before interest and taxes fell to 2 billion euros ($2.1 billion) in 2024, lower than the same period last year and lower than Vara's expectations of 3.2 billion euros.

Due to the bleak outlook for the automotive and agricultural industries that BASF supplies, earnings after adjusting for one-time expenses were roughly in line with the expectations released in October for 2024.

Due to the weak performance of the chemical division in the fourth quarter, earnings before interest, taxes, depreciation and amortization and special items were 7.9 billion euros, slightly below the lower limit of the 2024 guidance.

The German industrial giant is also carrying out a large-scale restructuring plan to cut costs in Europe by more than 2 billion euros a year due to the deteriorating outlook for the German industry.

Growth in the German industry is expected to be just 2% through 2024 as political turmoil and an economic stagnation dragged down by one of Europe’s highest energy prices hit chemical manufacturers that require large amounts of energy to produce.