BASF sees silver lining from supply disruptions, stands by guidance
BASF's Financial Outlook Amid Geopolitical Tensions
FRANKFURT, April 30 (Reuters) - Germany's BASF said on Thursday that the Iran war's fallout was too unpredictable to change the global industrial chemicals company's earnings projections, and that its secure supplies through June would even give it a competitive edge.
Impact of Iran War on BASF's Operations
The Ludwigshafen-based group, which like its rivals depends on economic growth to drive earnings, said the Iran war - though hitting business sentiment and disrupting energy and materials markets - was also offering opportunities.
Supply Chain Resilience and Pricing Power
Finance chief Dirk Elvermann told analysts in a call that at least until end-June, prescient stockpiling ensured the group's deliveries were secure despite market disruptions, allowing it to leverage its pricing power.
"The physical product supply is secured also for the second quarter. We also have the possibility to play our long value chains. And this together with the closeness and proximity to our customers is really paying off," the CFO said.
Regional Supply Bottlenecks
He confirmed reports that supply bottlenecks in the wider industry were for now limited to Asia, though not a major problem for BASF's sites there.
BASF's Earnings Guidance and Market Performance
The group reaffirmed its 2026 outlook for adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to reach 6.2 billion to 7.0 billion euros, compared with 6.6 billion euros in 2025 and average analyst expectations of 6.82 billion euros ($7.97 billion).
BASF shares were down 0.1% at 0725 GMT. Despite initial losses since U.S.-Israeli attacks on Iran started at the end of February, the stock has been up by about 10% over that time.
Oil Price Assumptions and Economic Uncertainty
BASF was also still projecting an average oil price of $65 per barrel of Brent crude in 2026, unchanged from its February assumptions and little over half of current levels.
Again, it said the uncertainty kept it from making changes, citing only vague trends.
"The assumptions made in February regarding growth in global GDP, industrial production and chemical production may prove to be too optimistic. The oil price may be higher than our existing assumption," it said.
Brent crude futures jumped over 6% on Thursday to a four-year high of $125 a barrel following a report that the U.S. is considering additional military action against Iran.
Recent Financial Results and Strategic Investments
First-quarter EBITDA, adjusted for special items, declined 5.6% to 2.36 billion euros, but surpassed an average analyst forecast of 2.19 billion euros.
Last month, BASF underscored the need for a 9 billion euro investment in China, the single largest expansion project in the company's 161-year history, even as global markets cooled down.
Challenges in the Home Market
BASF has struggled particularly in its home market - where it cut costs and shuttered production lines - and where the business cycle shows no sign of turning a corner.
Last week, the German government cut its growth forecasts for 2026 and 2027 and raised its inflation projections, as the U.S.-Israeli war on Iran drives up oil and gas prices.
Exchange Rates
($1 = 0.8578 euros)
($1 = 0.8552 euros)
Reporting Credits
(Reporting by Ludwig Burger and Patricia Weiss, Editing by Friederike Heine, Thomas Derpinghaus and Tomasz Janowski)
