How are energy investors positioned?
Investing.com -- BASF shares rose on Wednesday after the company maintained its full-year guidance, despite reporting an 82% drop in second-quarter net income and weaker performance in key segments.
Net income fell to €79 million from €430 million a year earlier. Adjusted EBITDA was €1.77 billion, in line with pre-released figures and consensus expectations.
Adjusted EBIT declined 16% to €810 million. Revenue dropped 2% year-over-year to €15.77 billion, with organic sales up 1% on a 4% increase in volumes and a 3% decline in prices. Currency effects reduced sales by 3.7%.
The chemical producer reaffirmed its 2025 adjusted EBITDA guidance of €7.3 billion to €7.7 billion and free cash flow target of €0.4 billion to €0.8 billion.
Capital expenditure for the year was lowered to €5 billion from €5.2 billion. BASF also raised its cost-saving target to €1.6 billion by 2025, up from €1.5 billion.
Margins declined during the quarter. The adjusted EBITDA margin dropped 90 basis points to 11.2%, while adjusted EBIT margin also fell 90 basis points to 5.1%.
The Chemicals segment posted adjusted EBITDA of €209 million, down 53%. Sales fell 12% to €2.50 billion, with organic revenue down 13% on a 12% price drop. Petrochemicals and Intermediates saw organic declines of 15% and 6%, respectively.
Materials recorded adjusted EBITDA of €408 million, a 9% decline. Sales fell 5% to €3.24 billion, with a 2% drop in organic sales.
Volumes rose 1%, while prices decreased 3%. Monomers declined 4% and Performance Materials was flat.
Industrial Solutions posted adjusted EBITDA of €307 million, down 16%. Sales declined 9% to €2.16 billion.
Organic sales dropped 5%, with Dispersions & Resins and Performance Chemicals each down 5%.
Surface Technologies was the best-performing segment. Adjusted EBITDA rose 10% to €350 million. Sales grew 11% to €3.34 billion.
Organic revenue increased 16%, with a 13% rise in volumes and 3% in prices. ECMS rose 21% organically, Battery Materials 12%, and Coatings 9%.
Nutrition & Care delivered adjusted EBITDA of €196 million, up 7%. Revenue fell 3% to €1.62 billion.
Organic sales were down 1%, with a 4% decline in volumes and a 3% increase in prices. Care Chemicals grew 4%, while Nutrition & Health dropped 12%.
Agricultural Solutions reported adjusted EBITDA of €417 million, up from €135 million a year ago.
Sales rose 13% to €2.20 billion, with 20% organic growth led by a 21% rise in volumes.
Other operations posted an adjusted EBITDA loss of €114 million, compared with a €62 million gain in the prior year.
Operating cash flow declined to €1.59 billion from €1.95 billion. Free cash flow rose to €533 million from €471 million. Net debt stood at €21.28 billion, equal to 3.3 times adjusted EBITDA.