BASF SE on Wednesday raised its 2021 guidance after it said it generated strong sales growth in the third quarter.
The German chemicals conglomerate said it swung to a net profit of 1.25 billion euros ($1.45 billion) for the quarter to the end of September, compared with a net loss of EUR2.12 billion a year earlier.
The Ludwigshafen-based company posted revenue that jumped 42% on year to EUR19.67 billion, above analysts' expectations of EUR17.83 billion according to estimates provided by the company.
Demand remained solid during the summer months and, compared with 3Q 2020, the company increased prices by 36% and volumes by 6%, BASF said.
But growth momentum slowed compared with the second quarter of 2021 because of supply bottlenecks, which the company assumes will continue to negatively affect global economic recovery in the fourth quarter, BASF said.
The company's automotive business was especially affected by continuing chip shortages, it said, and BASF flagged power cuts in China as having a negative impact on production.
However, BASF anticipates continuing solid demand, and raised its forecasts for the year.
It expects sales to grow to between EUR76 billion and EUR78 billion, from EUR74 billion to EUR77 billion previously. It also expects earnings before interest and taxes before special items of between EUR7.5 billion and EUR8.0 billion, from EUR7.0 billion to EUR7.5 billion previously.
Write to Ed Frankl at firstname.lastname@example.org
Corrections & Amplifications
This item was corrected at 0701 GMT to reflect that BASF's headquarters is in Ludwigshafen. The original version incorrectly said it was based in Leverkusen in the third paragraph.
BASF's headquarters is in Ludwigshafen. "BASF Raises Guidance After Posting Strong 3Q Sales," at 0534 GMT, incorrectly said it was based in Leverkusen.