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BASF agrochemical sales rose 10% in Q4 2016
Feb. 28, 2017
BASF Agricultural Solutions
GermanyFollow
GermanySales of BASF’s Agricultural Solutions segment rose by 10% to €1,281 million in the fourth quarter due to higher volumes. EBIT before special items decreased by €65 million to €79 million due to higher fixed costs, partly resulting from new or expanded production facilities, for example for the herbicide dicamba.
Full year result
For the full year, sales fell by 4% to €5,569 million as a result of lower sales volumes and negative currency effects. The challenging market environment for crop protection products particularly dampened demand for insecticides in South America and for fungicides in Europe. Prices matched the level of 2015. Strict cost management enabled fixed costs to be reduced in the Agricultural Solutions segment. Thanks to this development, EBIT before special items matched the previous year’s level at €1.1 billion despite the sales decline.
In Europe, sales declined by €149 million to €1,958 million. This was mainly attributable to weaker demand for fungicides in the first half of the year. Especially in Germany and Poland, volumes fell as a result of unfavorable weather conditions and our customers’ high inventory levels. Price increases, primarily in central and eastern Europe, including Russia, were unable to offset the lower volumes and negative currency effects.
Sales in North America decreased by €69 million to €1,801 million, predominantly because of lower prices, especially for fungicides in the United States. Higher demand for fungicides and insecticides in the United States and for herbicides in Canada helped support volumes development.
At €549 million, sales in Asia exceeded the previous year’s level by €24 million. We were able to raise sales volumes in all indications, largely driven by substantially higher demand for herbicides in India and the overall positive volumes development in Indonesia and Australia. Currency effects slightly dampened sales.
In South America, sales fell by €57 million to €1,261 million, basically due to lower insecticide volumes in Brazil. This was primarily attributable to our customers’ high inventory levels and critical economic situation, as well as the shrinking market for insecticides in the region. Price increases were unable to fully compensate for the drop in volumes.
Outlook
BASF anticipates stable market development for crop protection products in 2017. The company’s goal is to utilize growth potential on the market primarily through the launch of innovative products, growth in the emerging markets – especially Asia – and a strong customer focus. BASF is planning to increase volumes in 2017 and considerably boost sales levels. Because of ongoing margin pressure in a market environment that remains challenging, BASF assume a slight increase in EBIT before special items.
Source: BASF News Release
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