Slump takes 70% off BASF results

THE world's largest chemicals group, Germany's BASF, has been hit hard by the global economic downturn - fourth-quarter operating profits in 2001 fell by 70% to e252m (£156m).

Although chairman Dr Jürgen Strube has 'guarded optimism' about current trading, there has been no sign of a recovery in BASF order books so far this year.

Strube believes that 2002 will be another difficult year, but he added: 'We hope that demand for products from the chemical industry will increase in the second half of the year.'

The group embarked on a restructuring in the year ended 31 December and this has resulted in cost savings of e250m. Strube believes that further cost savings during the current year will result in it achieving two-thirds of the total targeted amount. Cost savings could be as high as e1bn by 2003.

The group, based at Ludwigshafen on the Rhine, suffered a 17.5% fall in sales in the fourth quarter of 2001 to e7.6bn. It took a net loss of e469m in the period, compared with a profit of e227m in the same period in 2000.

The sale of its pharmaceuticals business for e6bn helped offset the costs of restructuring. The 2001 dividend will be unchanged at e1.30.