Sunday 26 October 2014

BASF report Q3 2014

BASF, Q3, 2014, front page

The report from BASF was not well accepted and the price of the shares dropped with as much as -2.8%. What was then in it?

If you want to read the report in full, that all material I present here is coming from, then please go here.

In the running quarter they increased their revenue by 3.3% but on the running nine months they are more or less flat on the revenue compared to 2013. The earnings were for the quarter disappointing but are for the running year still looking ok with 3.2% up. From this I draw the conclusion that I should at least be able to receive the same dividend as last year. I hope I will not be wrong on that remark. Below we can also see that they have increased their workforce and yet they are paying out less in salaries.

Financial highlights, BASF, Q3, 2014

When we look at the sales in the segments I was either wrong in assuming that oil and gas was suffering or the effect has yet to arrive since they had a very good result during Q3 2014. They are however planning to divest the gas trading and storage so there will generally be a drop not only in that segment but also an overall revenue drop for 2014 compared to 2013 according to their outlook. Either way the segments are making good revenues with only minor changes.

BASF, Q3, 2014, segment sales

On a final note I must say that BASF painted a unhappy picture in the outlook. They fear being hit hard by the declining growth in China as will all the big German companies including the automotive industry.

Conclusion: The report is fully acceptable for me and BASF is still doing good business. The year will not come out as well as 2013 and maybe I can look forward in the future to increase my position further. I will of course keep my shares.

To find out more about BASF please see the analysis of BASF 2014.

No comments: