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(Bloomberg) — BASF SE raised its earnings expectations for the year after the chemicals maker lifted prices for its products that include base materials for plastics and cleaning agents.
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The German manufacturer now sees Ebitda before special items of at least €6.9 billion ($7.9 billion), it said Wednesday, up from at least €6.2 billion previously. Elevated sales volumes also bolstered business during the second quarter. Still, BASF flagged low visibility for the remainder of the year due to the continued fighting in the Middle East.
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The shares declined 4.4% as of 2:14 p.m. in Frankfurt. The stock is still up some 7% this year.
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Since the start of the US-Iran conflict, BASF has been charging higher prices after rivals in Asia suffered significantly more disruption to supplies. At the same time, structural problems, including weak demand and global overcapacity, continue to cloud BASF’s outlook.
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The guidance hike isn’t entirely surprising. Citi analysts last week said they expected BASF to publish financial figures ahead of time amid positive news from peers including Covestro AG, which raised its operating earnings forecast for fiscal 2026.
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As for the second half of this year, BASF said that development of the global economy and regional chemical markets strongly depends on talks between the US and Iran.
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A prolonged closing of the Strait of Hormuz, a key trade route for energy and petrochemical feedstocks, “would weigh significantly on economic activity,” BASF said. The two sides quickly coming to an agreement “would provide additional momentum for economic growth.”
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Under Chief Executive Officer Markus Kamieth, BASF has accelerated efforts to streamline its portfolio and bolster returns. It’s preparing to list its agricultural solutions division by mid-2027 while continuing cost-cutting measures at its flagship Ludwigshafen site.
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Last year, BASF agreed to sell a majority stake in its automotive coatings business to Carlyle Inc.
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(Updates with comment on second-half visibility in second paragraph)
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