BASF Earnings Lower, Without Wingas

German chemicals giant BASF has said that 3Q sales were one-fifth lower and earnings 22.5% lower year-on-year as a result of its divestment of gas trading activities last year to Russian state-run Gazprom.

Preliminary group sales in 3Q 2016 were down to €14bn, while earnings before interest and tax (Ebit) were €1.5bn, said BASF October 12. The results were higher than average analysts’ estimates, it said, adding that earnings outside oil and gas were “considerably higher” year-on-year; it will report full 3Q earnings on October 27.

BASF confirmed its full year 2016 outlook, saying that sales would decline by 6% or more because of its divestment of gas trading, while Ebit before special items could be as much as a tenth lower than in 2015.

BASF completed its asset swap with Gazprom on September 30 2015. That resulted in gas trading companies Wingas, WIEH, WIEE and storage operator Astora becoming entirely Gazprom-owned. In return, BASF-owned Wintershall secured a 25.01% stake in the project to develop blocks 4A and 5A of the Achimov deposits of the Urengoy field, but it also ceded a 50% stake in non-Norway North Sea producer Wintershall Noordzee to Gazprom.

Mark Smedley