BASF guides slowdown for 2022 after energy costs bite in fourth quarter

The German chemical company said January 2022 figures were above the same month of the previous year, but targeted full-year revenue of between 74 billion and 77 billion euros ($82.84 billion and $86.20 billion). That falls below 2021’s figure of EUR78.60 billion.BASF also expects 2022 adjusted earnings before interest and taxes to be between EUR6.6 billion and EUR7.2 billion–after it more than doubled in 2021 to EUR7.77 billion–and return on capital employed to be between 11.4% and 12.5%–down from 13.5%.

Smelters and chemical factories across Europe were already struggling before the invasion sparked another jump in gas and electricity prices. Now, a growing list of companies including Europe’s biggest chemicals maker BASF SE are warning the energy crisis will keep hacking away at their bottom lines for the foreseeable future.“Energy prices will stay at a high level and they won’t go back to normal soon,” said Martin Brudermueller, BASF’s chief executive officer.BASF already took an 800-million euro ($900 million) hit from rising gas prices in the fourth quarter, and the situation could worsen if the U.S. and Europe broaden sanctions against Russia, which supplies more than 40% of the European Union’s natural gas.“It would be very difficult to replace Russian gas with liquefied natural gas from elsewhere,” Brudermueller said.