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BASF says high oil prices underpin record results

FRANKFURT - BASF, the world's biggest chemical company, benefited from high oil prices in the second quarter to post record results on Thursday.

Net profit jumped by 27 percent to 1.3 billion euros (2.02 billion dollars), while operating profit, which the group uses in its forecasts, gained 19 percent to 2.4 billion euros, a statement said.

Sales rose by 11 percent to 16.3 billion euros.

Analysts polled by Dow Jones Newswires had expected net profit of 1.103 billion euros and sales of 15.629 billion.

BASF maintained its full-year forecasts for sales and core earnings before exceptional items.

‘Despite the challenging economic environment with high raw material costs, we are confident that we will achieve the goals we have set for 2008,’ chairman Juergen Hambrecht was quoted as saying.

The group's oil and gas division posted a 41 percent jump in sales, and core earnings before exceptional items gained 44 percent.

Agricultural activities including pesticides turned in a 21 percent sales increase and core earnings that leapt by 51 percent.

In the chemicals division however, sales gained 18 percent but core profit fell by 34 percent.

Sales of plastic products edged up by four percent, but profit lost 14 percent, in large part the result of economic conditions in North America, the company said.

In the first half of the year, BASF sales gained 10 percent to 32.2 billion euros, while core earnings before special items ‘rose by 15 percent to around 4.8 billion euros,’ the statement said.

‘Demand for our products remains strong,’ Hambrecht said.

‘However, sales prices have to be increased considerably in some cases in order to pass on significantly higher raw material costs.’