German chemicals maker BASF has seen a fall in profit in the second quarter on the back of weaker global demand and mounting pressure on product margins. The firm says reaching its full-year targets will be a challenge.
BASF's net profit dropped 4.2 percent to 1.16 billion euros ($1.5 billion) in the second quarter of 2013, compared with the same three-month period a year ago, according to the firm's earnings report released July 25.
The profit plunge came in spite of revenues that rose by 2.9 percent to 18.35 billion euros, the German chemicals and oil company announced.
BASF, which is based in Ludwigshafen, Germany, attributed the result primarily to smaller profit margins in some of its basic chemicals, as well as to intense competition in higher-priced processed products.
In addition, euro earnings were further reduced by a weaker Japanese currency.
Describing the current business environment in the industry as volatile, BASF Chief Executive Kurt Bock said that he expected markets in Europe to continue shrinking and that China was no longer running at full power. Moreover, expansion in the United States was only moderate at the moment, he added.
Nevertheless, the CEO maintained its full-year outlook of growing sales and profits, adding, however, that reaching that target was now significantly more challenging than at the beginning of the year.
uhe/mkg (AP, Reuters, dpa)