Exclusive BASF Takes $652 Million Writedown on Low Oil Price, Shares Drop
BASF, the world’s largest chemicals firm, gave a profit warning on Wednesday as lower energy prices forced it to take a writedown of €600 million, or $652 million, on its oil and gas exploration operations. Its shares fell as much as 4.6 percent. The Ludwigshafen-based firm, which owns Germany’s largest oil and gas producer Wintershall, said a strong decline in oil and gas prices over the past several months led to the non-cash writedown of its oil and gas operations. “BASF anticipates that prices for oil and gas will remain at a low level in 2016. The assumptions for oil and gas prices have also been reduced for subsequent years,” BASF said in a statement. As a result of the writedown, the company said it expects an 18 percent drop in its 2015 operating profit before interest and taxes to €6.2 billion from €7.6 billion the year before. BASF shares dropped as much as 4.6 percent to €59.20 in Frankfurt at market open. By 09:34 local time, the stock was down 2.4 percent at €60.57. The company said it expects its full year sales to be 5 percent lower at €70.4 billion, mainly due to the divestment of BASF’s natural gas trading and storage activities.
01/27/2016 - 09:57 AM