BASF AG, the world's largest chemical producer, said fourth-quarter profit rose 31 percent after the company expanded in Asia and made acquisitions to add products.
Net income climbed to 732 million euros ($961 million), or 1.46 euros a share, from 560 million euros, or 1.10 euros, a year earlier, the Ludwigshafen, Germany-based company said today in a statement. The results beat the 704 million-euro median estimate of eight analysts surveyed by Bloomberg.
BASF has added new factories to meet surging Asian demand for polymers used in refrigerators and shoes. Expansion around the globe and the $4.8 billion purchase of Engelhard Corp., the U.S. inventor of the catalytic converter, helped BASF avoid the fate of Dow Chemical Co., which had a drop in fourth-quarter profit because of sliding North American plastic prices.
``Our value-enhancing acquisitions have helped us to grow in highly innovative areas,'' Chief Executive Officer Juergen Hambrecht said in the statement. ``We have broadened our competence and have become more resilient to cyclicality.''
Shares of BASF have risen 21 percent in the past year, taking the company's market value to 38.2 billion euros. Dow Chemicals has lost 1 percent, still outperforming the Bloomberg Europe Chemicals Index of leading European chemical stocks, which has slumped 17 percent in the period.
Sales rose 24 percent to 14.5 billion euros, also beating the analyst survey's median. Earnings before interest and taxes before special items gained 17 percent to 1.9 billion euros. The dividend for 2006 will rise by 1 euro to 3 euros.
`Bullish' Outlook
BASF said it expects ``significantly'' higher sales this year, driven by recent acquisitions as well as organic growth. It has a target to earn one-fifth of chemical sales in Asia by 2010.
Midland, Michigan-based Dow said its U.S. sales fell 8.3 percent on lower prices, led by a drop in polyethylene, the world's most-common plastic. DuPont Co. also reported lower sales at home. That may mean the chemical industry reached a peak in 2006 and the outlook for 2007 and beyond will be more cautious, Metzler analyst Oliver Schwarz said in a Feb. 19 note.
``This outlook is very bullish,'' said Andreas Heine, a Munich-based analyst at HVB Group, who has a ``buy'' rating on BASF stock. ``They want to grow even in miserable recession years. In the past, their outlook was rather conservative therefore they probably feel comfortable with saying that.''
BASF does about 22 percent of its business in North America. The U.S. alone accounts for more than one-third of Dow's sales.
Acquisitions Boost
BASF, whose clients include China's largest oil producer PetroChina Co., last year bought a manufacturer of admixtures to help concrete dry faster on building sites and a maker of emission- control technology for engines in the country. Its products range from glue and fertilizer to animal feed and industrial coatings.
Engelhard, purchased in June, will help BASF tap growing demand for pollution-control devices from clients including Ford Motor Co. and Mack Trucks Inc. Acquisitions last year also included the construction-chemicals division of Degussa AG.
The integration of new businesses is ``making good progress'' and will probably be completed by mid 2007, BASF said. The company aims to save about 290 million euros in costs by 2010. The German company said it earned a premium of 2.1 billion euros on its cost of capital, growing faster than the market.
Net income climbed to 732 million euros ($961 million), or 1.46 euros a share, from 560 million euros, or 1.10 euros, a year earlier, the Ludwigshafen, Germany-based company said today in a statement. The results beat the 704 million-euro median estimate of eight analysts surveyed by Bloomberg.
BASF has added new factories to meet surging Asian demand for polymers used in refrigerators and shoes. Expansion around the globe and the $4.8 billion purchase of Engelhard Corp., the U.S. inventor of the catalytic converter, helped BASF avoid the fate of Dow Chemical Co., which had a drop in fourth-quarter profit because of sliding North American plastic prices.
``Our value-enhancing acquisitions have helped us to grow in highly innovative areas,'' Chief Executive Officer Juergen Hambrecht said in the statement. ``We have broadened our competence and have become more resilient to cyclicality.''
Shares of BASF have risen 21 percent in the past year, taking the company's market value to 38.2 billion euros. Dow Chemicals has lost 1 percent, still outperforming the Bloomberg Europe Chemicals Index of leading European chemical stocks, which has slumped 17 percent in the period.
Sales rose 24 percent to 14.5 billion euros, also beating the analyst survey's median. Earnings before interest and taxes before special items gained 17 percent to 1.9 billion euros. The dividend for 2006 will rise by 1 euro to 3 euros.
`Bullish' Outlook
BASF said it expects ``significantly'' higher sales this year, driven by recent acquisitions as well as organic growth. It has a target to earn one-fifth of chemical sales in Asia by 2010.
Midland, Michigan-based Dow said its U.S. sales fell 8.3 percent on lower prices, led by a drop in polyethylene, the world's most-common plastic. DuPont Co. also reported lower sales at home. That may mean the chemical industry reached a peak in 2006 and the outlook for 2007 and beyond will be more cautious, Metzler analyst Oliver Schwarz said in a Feb. 19 note.
``This outlook is very bullish,'' said Andreas Heine, a Munich-based analyst at HVB Group, who has a ``buy'' rating on BASF stock. ``They want to grow even in miserable recession years. In the past, their outlook was rather conservative therefore they probably feel comfortable with saying that.''
BASF does about 22 percent of its business in North America. The U.S. alone accounts for more than one-third of Dow's sales.
Acquisitions Boost
BASF, whose clients include China's largest oil producer PetroChina Co., last year bought a manufacturer of admixtures to help concrete dry faster on building sites and a maker of emission- control technology for engines in the country. Its products range from glue and fertilizer to animal feed and industrial coatings.
Engelhard, purchased in June, will help BASF tap growing demand for pollution-control devices from clients including Ford Motor Co. and Mack Trucks Inc. Acquisitions last year also included the construction-chemicals division of Degussa AG.
The integration of new businesses is ``making good progress'' and will probably be completed by mid 2007, BASF said. The company aims to save about 290 million euros in costs by 2010. The German company said it earned a premium of 2.1 billion euros on its cost of capital, growing faster than the market.
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