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Investing.com -- Shares of BASF SE (ETR:BASFN) rose more than 3% on Wednesday after the German chemicals group announced a €1.5 billion share buyback and reported stronger-than-expected third-quarter earnings, helped by government grants and gains in its Surface Technologies division.
BASF reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of €1.54 billion for the third quarter, 6% above Jefferies’ estimate of €1.46 billion and 3% higher than the consensus forecast of €1.50 billion.
Group sales were €15.23 billion, broadly in line with expectations and down 3% from €15.74 billion a year earlier.
Operating cash flow was €1.37 billion, compared with €2.05 billion in the same quarter of 2024. Free cash flow totaled €398 million, down from €569 million.
Net debt stood at €20.9 billion, equal to 2.8 times net debt-to-EBITDA. The company reaffirmed its full-year 2025 adjusted EBITDA outlook of €6.7 billion to €7.1 billion and maintained free cash flow guidance between €0.4 billion and €0.8 billion.
The world’s largest chemical producer said the €1.5 billion share repurchase will begin in November and run through June 2026, representing about 4% of shares outstanding.
Morgan Stanley in a note said that the share repurchase is equivalent to €1.68 per share, or 3.9% of the current share price, and noted, “we judge that BASF is buying back shares ahead of schedule to 1) reflect the improved strength in the balance sheet supported by the value realization in Suvinil, Harbour Energy and the funds received from the German government for the compensation around Wintershall Dea’s Russian assets.”
By division, Surface Technologies delivered adjusted EBITDA of €443 million, well ahead of expectations, helped by government grants.
Chemicals earned €262 million, also above forecasts. Industrial Solutions posted €291 million, below estimates, while Nutrition & Care and Agricultural Solutions recorded €134 million and €80 million respectively, both falling short of consensus.
Sales in the Chemicals division were €2.53 billion, down 9.4% on an organic basis as prices fell 13.1% and volumes rose 3.7%.
The Materials segment reported €3.15 billion in sales, down 3.9% organically as prices dropped 5.4%.
Operating profit before special items was €594 million, 34% higher than Jefferies’ estimate and 15% above consensus but down 6% from a year earlier. Net income was €172 million, compared with €287 million in the third quarter of 2024.