By Mantik Kusjanto

LUDWIGSHAFEN, Germany (Reuters) - BASF (BASF.DE: Quote, Profile, Research), the world's biggest chemicals group by sales, missed market expectations for its quarterly profit on Thursday, due to long maintenance shutdowns at its petrochemical plants.

But BASF proposed a 30 percent increase in its 2007 dividend to 3.90 euros a share, and repeated its commitment to raise or at least maintain its payout each year.

"The dividend is a support to the shares, but we believe the increasing probability of earnings decline remains a constraint to the shares," Citigroup analysts Sophie Jourdier and Andrew Benson said in a note.

Shares in BASF were 0.8 percent higher at 87.32 euros by 1250 GMT, after dropping as low as 85.26 euros, lagging a 1.4 percent rise in the pan-European DJ chemicals index .

Fourth-quarter earnings before interest and tax and before special items were 1.76 billion euros ($2.6 billion), lagging analysts' average estimate of 1.86 billion euros.

Longer than scheduled shutdowns at BASF's crackers in Antwerp, Belgium, and in Port Arthur, Texas, almost halved operating profit before special items at its chemicals unit in the last quarter. The unit generated about a quarter of the company's earnings last year.

BASF, which has spent 7 billion euros in 2006 on acquisitions partly to reduce the cyclical nature of its earnings, forecast higher sales and slightly higher operating profit before special items for this year.

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