BASF Says 2017 Results to Beat Forecasts

BASF, the German chemicals giant that owns upstream firm Wintershall, said January 18 it expects 2017 earnings, as it forecast, to be “considerably above the level of the previous year.” 

It does not report its definitive full year 2017 or 4Q results until February 27.

However, it said January 18 that its preliminary sales figure was up 12% at €64.5bn in full year 2017, while earnings before interest and tax (Ebit) and before special items was expected to be €8.3bn, up 32%. Growth was chiefly due to strong chemicals earnings but it noted too “significant earnings improvements in the [Wintershall] oil and gas segment.” BASF group net income is set to rise by 50% to €6.1bn.

The group said its preliminary results also exceed analysts’ overall estimates, which for full year 2017 net income ranged between €4.9bn and €5.7bn, with an average of €5.3bn - so some €0.8bn less than BASF's own preliminary figure now released. The analysts’ average estimate for the Oil & Gas segment was a full year 2017 Ebit of €750mn on sales of some €3.24bn; BASF released no data as yet there.

In October 2017, BASF reported 3Q net income from Oil & Gas up 321% at €139m, mainly thanks to special income from Wintershall's sale of certain interests in a shale gas concession in Argentina. 

BASF and Russian-owned LetterOne signed December 8 a letter of intent to merge their respective oil and gas subsidiaries into a new company, Wintershall-DEA that they would respectively own 67%/33%; the merger if completed is expected to close 2H 2018, with BASF to nominate its CEO and DEA its number two; no such appointments have yet been announced.