Bayer and BASF, Germany’s two largest chemical companies, reported record sales for 2012 last week, with the strongest growth coming from developing countries. But earnings at both firms were below the levels recorded in 2011.
Bayer’s net earnings for 2012 were down 1.0% to $3.2 billion, based on an 8.8% sales increase to $52.4 billion. Bayer’s life sciences businesses recorded the strongest growth in earnings and sales. “We continued to grow dynamically, with all the subgroups posting gains in sales and earnings before special items,” said Chairman Marijn E. Dekkers, speaking last Thursday at the firm’s annual financial briefing in Leverkusen, Germany. Bayer’s 2012 earnings were hampered by one-time items totaling $2.3 billion.
Dekkers forecasts that the company will increase sales in 2013 by 4–5% and pretax profits by a single-digit percentage. The firm plans to spend $4.2 billion on R&D in 2013, a hike of about 7%.
BASF reported net earnings in 2012 of $6.5 billion, a 21.2% drop compared with 2011, on a 7.1% sales increase to $103.9 billion. The firm said its earnings were reduced partly because of tough market conditions in chemicals and higher sales in its oil and gas operations, which are subject to steep taxes. Oil and gas and agricultural solutions were BASF’s strongest-performing businesses.
BASF Chairman Kurt Bock forecasts that global chemical output will grow 3.6% in 2013, up from 2.6% in 2012. “We aim to grow again in 2013,” he said.
BASF spent $2.2 billion on R&D in 2012, a hike of about 9% compared with 2011. The firm plans to increase R&D spending yet again in 2013, Bock said.
Chemical & Engineering News
Copyright © American Chemical Society