Negative currency effects and, in some cases, falling prices also impacted BASF’s business in the third quarter.
Improved demand in basic chemicals was only able to partially compensate for this, so that the chemical giant’s sales fell slightly and the operating profit was slightly more noticeable, but slightly exceeded market expectations, as the company announced in Ludwigshafen. BASF confirmed its annual forecast, but adjusted it to reflect the sold coatings business. The group is using the sale as an opportunity to start buying back shares in November. This was originally planned from 2027.
“Customer purchasing behavior continued to be cautious in almost all industries and regions,” said CEO Markus Kamieth with a view to the third quarter. “Nevertheless, in this challenging environment, BASF’s result was slightly above market expectations and therefore only slightly below the level of the previous year’s quarter.”
BASF generated EBITDA adjusted for special items including the discontinued coatings business of 1.544 billion euros, 4.8 percent less than in the previous year. Sales fell by 3.2 percent to 15.23 billion euros. According to a consensus collected by Vara Research, analysts had expected sales of 15.19 billion euros and adjusted EBITDA of 1.5 billion euros.
BASF gave its forecast for EBITDA before special items, adjusted for the coatings business, at 6.7 to 7.1 billion euros. Free cash flow is still expected to be between 0.4 and 0.8 billion euros.
From November, BASF wants to use cash inflows from the sold business – the separation from architectural coatings in Brazil has already been completed – for a share buyback with a volume of 1.5 billion euros. This should be completed by the middle of next year. In total, BASF has announced share buybacks with a volume of 4 billion euros by the end of 2028.
BASF will start a share buyback program in November. As the DAX group announced, it wants to acquire its own shares with a volume of up to 1.5 billion euros from November to June next year. The buyback program is part of the share buyback announced in September 2024 totaling 4 billion euros by the end of 2028. The bought back shares are to be withdrawn and the share capital reduced accordingly.
BASF wants to keep the total distribution to shareholders at least at the level of previous years in the medium term through a combination of dividends and share buybacks. BASF has therefore set itself the goal of distributing at least 12 billion euros to its shareholders from 2025 to 2028. Specifically, the company wants to pay a dividend of at least 2.25 euros per share or around 2 billion euros per year. The total dividend distribution of around 8 billion euros over the four-year period is to be supplemented by share buybacks amounting to at least 4 billion euros.
These share buybacks were originally scheduled to begin in 2027 at the latest. Now part of it is being brought forward. By buying back its own shares, available capital is returned to shareholders, the capital structure is optimized and earnings per share are increased, as BASF continued. BASF will also reduce net debt in order to strengthen its balance sheet. The maturities of the outstanding bonds enable a significant reduction in debt in the coming year.
BASF shares significantly higher – 200-day line in sight
BASF’s quarterly figures received a positive response on Wednesday. The chemical company’s shares rose by 3.4 percent to 44.46 euros in XETRA trading. They were therefore among the strongest values in the leading index DAX, which remained only slightly changed.
In the short and medium term, the chart picture for BASF shares is brightening with the current price increase. However, in the longer term, the price continues to move sideways. It would therefore be important to jump above the 200-day line, which is currently at 44.85 euros. The papers are supported in the 42 euro range.
Although the world’s largest chemical company also experienced weak demand in the third quarter, profits did not fall as sharply as analysts had feared. Analyst Chris Counihan from the investment house Jefferies sees the quarterly report, including the share buybacks, as price support.
DOW JONES / dpa-AFX
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