Despite the significant uncertainty the Middle East conflict introduces to the global economy, German chemical giant BASF has reaffirmed its fiscal year 2026 targets and continues to advance its group restructuring.
At Thursday's Annual General Meeting, BASF's CEO, Dr. Martin Brudermüller, stated that the global economy is undergoing a fundamental transformation, and the company must respond by reducing complexity and enhancing efficiency, adding that "waiting is not an option." Chief Financial Officer Dirk Elvermann emphasized that the resilience built by the company in recent years is paying off, with BASF benefiting from its global footprint and local supply chains, and has observed no supply bottlenecks to date.
Regarding first-quarter performance, BASF achieved a "solid" start. Financial reports indicate that quarterly sales slightly decreased by 3% to 16.02 billion euros, affected by currency and price factors, but net profit increased by 14.8% to 927 million euros. Despite the market environment being impacted by the Middle East conflict since March, sales volumes grew in almost all business segments, thanks to growth in the Chinese market. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was 2.36 billion euros, exceeding analyst expectations of approximately 2.19 billion euros.
Elvermann pointed out that customer sales in the Middle East account for less than 1% of the group's total revenue, making the risk manageable. Through its global integrated production system and flexible trading business, the company has hedged most of its supply risks and believes supply security can be guaranteed at least until the end of the second quarter.
Based on this, management confirmed its full-year target: it expects adjusted EBITDA for 2026 to be between 6.2 billion and 7.0 billion euros. Elvermann expressed optimism for the second quarter, stating that pricing power in many business areas will begin to show, but uncertainty remains for the second half of the year due to the Middle East crisis.
During the meeting, Brudermüller also reassured investors concerned about the future of the Ludwigshafen headquarters, stating that "there are currently no further plans to close or sell core integrated capacity at the site," and the company invests at least 1.5 billion euros annually into it.
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