July 10, 2020 / 12:51 PM / 24 days ago

BASF turns to second-quarter net loss on Wintershall DEA impairment

BERLIN (Reuters) - BASF (BASFn.DE) said on Friday it slid to a second-quarter net loss on an 800 million euro ($903 million) impairment against its stake in energy group Wintershall DEA on worsening prospects for oil and gas prices.

The German chemicals group reported a net loss of 878 million euros, missing analyst consensus for a loss of 158 million.

Sales at Ludwigshafen-based BASF declined in the second quarter by 12.4% to 12.7 billion euros while operating profit before one-off items came in at 226 million - above market expectations but down 77% from a year earlier.

BASF did not explicitly link the decline in sales and operating profit to the coronavirus pandemic. But it did note that weak car industry demand had exerted a drag on several business divisions that had been partly offset by growth at its Nutrition and Care segment.

The company had flagged in April that it could not rule out a second-quarter loss as the coronavirus crisis hits automakers, who are its largest customer group.

At the bottom line, BASF’s slide into the red contrasted with a year-earlier profit of 6.0 billion euros, which had been boosted by a net book gain of 5.7 billion on its stake in Wintershall due to its merger with DEA.

Shares in BASF were up 1.1% in afternoon trade in Frankfurt.

The company is due to publish full half-year results on July 29. Under German stock exchange rules, companies must promptly report figures if they miss market expectations.

Reporting by Douglas Busvine; Editing by Thomas Escritt and Maria Sheahan

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