BASF Expects To Report Loss In FY22

BASF (BFA.L,BASFY.PK), a German chemicals major, said that it expects to report a loss in fiscal year 2022 compared to profit last year, due to non-cash-effective impairments on the shareholding in Wintershall Dea. Annual preliminary sales and EBIT before special items are at the level of average analyst estimates. But EBIT is below analyst consensus due to non-cash-effective impairment.

BASF Group expects net loss to be 1.38 billion euros in 2022 compared to net income of 5.52 billion euros in 2021. It is considerably below the average analyst estimates of 4.77 billion euros.

The 2022 result included non-cash-effective impairments on the shareholding in Wintershall Dea AG in the amount of about 7.3 billion euros, of which 5.4 billion euros in the fourth quarter of 2022. These impairments result in particular from the deconsolidation of the Russian exploration and production activities of Wintershall Dea due to the extensive loss of actual influence and economic expropriation.

Wintershall Dea intends to fully exit Russia in an orderly manner complying with all applicable legal obligations.

Sales for 2022 rose by 11 percent to 87.33 billion euros from the prior year and were thus in line with the 86 billion euros to 89 billion euros range forecast by BASF. The average analyst estimates for sales 2022 of the BASF Group were 87.95 billion euros according to Vara. The increase in sales was mainly driven by higher prices and positive currency effects.

Annual EBIT before special items amounted to 6.88 billion euros, a decrease of 890 million euros from the prior year.

The BASF Group’s EBIT amounted to 6.55 billion euros in 2022, below the figure for the prior year of 7.68 billion euros.

The company will publish its 2022 financial report on Friday, February 24, 2023.

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