FRANKFURT (Reuters) - Germany’s BASF (BASFn.DE) said on Wednesday its dividend policy and the value of assets on its balance sheet might be revised given uncertainty caused by the coronavirus crisis, particularly in North America and Europe.
The policy of the world’s largest chemicals and plastics maker by sales to increase dividends each year and its longer term target of lifting adjusted core earnings by 3%-5% annually were under review, Chief Executive Martin Brudermueller said.
More write downs, similar to the 800 million euro (724.6 million pounds) impairment German energy group Wintershall DEA unveiled this month, could also be on the cards for BASF in the next two quarters, finance chief Hans-Ulrich Engel warned.
“There is a considerable risk that both the economic recovery and the medium to long-term overall business development will be slower than what we saw before the corona-pandemic,” the chief executive told a call with reporters.
BASF, which is cutting 6,000 jobs, said it could not predict 2020 sales and earnings due to the economic uncertainty, after it released detailed second-quarter results earlier this month.
BASF limited predictions to saying operating profit before special items in the third quarter would not improve significantly in the second quarter, citing the usual summer lull and seasonally lower demand for agricultural products.
BASF reported second-quarter operating profit before one-off items fell 77% to 226 million euros.
The auto industry, BASF’s largest customer group, saw a collapse in demand in April to June, while ingredients for household products provided some stability, the company said.
Chemical production, used by BASF as a demand gauge, was in “a V-shaped recovery” in China, where the auto market returned to 10% growth in the second quarter, but prospects for North America and Europe remained uncertain, it said.
Editing by Jon Boyle and Edmund Blair