Germany's BASF sees profit in 2023, announces large cost-saving plan

German chemical and battery giant BASF saw a return to profit in fiscal year 2023, with a net income of €225 million ($244 million), compared to a loss of €627 million in 2022.

Income from operations (EBIT) before special items in the 2023 business year amounted to €3.8 billion.

The decline of €3.1 billion compared with the prior-year figure was primarily due to a considerably lower earnings contribution from the Chemicals and Materials segments.

EBIT was €2.2 billion in 2023; the steep decline compared with the prior-year figure resulted primarily from special items amounting to minus €1.6 billion.

Annual sales declined to €68.9 billion from €87.3 billion in the previous year, hurt by considerably lower prices and volumes.

Lower raw materials prices in particular led to lower prices in almost all segments.

Sales volumes fell in all segments as a result of weak demand from many customer industries.

The company said its board will propose a dividend of €3.40 per share, equal to the prior-year level, to the Annual Shareholders' Meeting.

The company said it plans to reduce costs at the Ludwigshafen site by a further €1 billion annually by the end of 2026.

This is in addition to the existing cost savings programme in non-production units with a focus on Europe and the adaptation of production structures in Ludwigshafen.

BASF expects the weakness in global economic momentum from 2023 to continue in 2024.

EBITDA before special items for 2024 is expected to rise to between €8.0 billion and €8.6 billion in 2024 compared to €7.7 billion in 2023.