BASF, Germany’s largest chemical manufacturer, reported a decline in annual earnings for 2024, with results falling below market expectations. The company attributed the drop to impairments in its surface technologies unit, which produces battery materials for electric vehicles (EVs), and to restructuring costs.
The unit faced challenges due to reduced EV demand in the German automotive sector and increasing competition from Chinese manufacturers.
See also: Vulcan and BASF Partner to Explore Geothermal Energy and Lithium Production at Ludwigshafen Site
Preliminary earnings before interest and taxes (EBIT) stood at €2 billion ($2.10 billion), significantly lower than the consensus estimate of €3.2 billion and below 2023 levels.
Adjusted earnings aligned with guidance issued in October, reflecting anticipated difficulties in the automotive and agricultural sectors, key markets for BASF’s products.
Earnings before interest, taxes, depreciation, amortization, and special items totaled €7.9 billion, just below the lower end of the company’s 2024 guidance. This performance was influenced by weaker results in the chemical division during the fourth quarter.
BASF is undergoing a restructuring program aimed at reducing costs by more than €2 billion annually in Europe, as the industrial outlook in Germany faces headwinds.
See also: BASF Develops High-Performance Polyphthalamide for Next-Generation Power Electronics
The German Chemical Industry Association (VCI) forecasts sector growth of just 2% in 2024, citing factors such as economic stagnation, political uncertainties, and high energy costs, which weigh heavily on energy-intensive industries.