BASF Cuts 2018 EBIT Outlook, Expects 'Considerable Decrease'

   By Cristina Roca

BASF SE (BAS.XE) has lowered its forecast for full-year earnings before interest and taxes, citing pricing pressures at its chemicals division, higher-than-expected costs related to low water levels on the Rhine river, and a decline in its auto industry business.

The German chemicals company now expects "a considerable decrease" in EBIT for 2018, it said late on Friday, having previously forecast a decline of up to 10%.

BASF said a sharp drop in isocyanate prices and lower margins for steam crackers at its chemicals division were the main reason for the guidance cut, but also noted that it now expects the effects of the Rhine's low water levels will cost it up to 200 million euros ($227.5 million) in the fourth quarter, more than previously anticipated.

The Rhine's water levels have affected a number of industrial companies this year, including Thyssenkrupp AG (TKA.XE) and ArcelorMittal (MT.FR).

BASF in October said it had to reduce production because the low water levels restricted raw-material supplies and reduced the availability of water, which it uses for cooling processes.

BASF said its automotive business has continued to decline since the third quarter, as demand from China slowed significantly, dragged down, in part, by the U.S.-China trade conflict.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

December 10, 2018 02:13 ET (07:13 GMT)

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