BASF SE (ADR) (OTCMKTS:BASFY) reported sales of €18.0 billion and €74.3 billion in 4Q2014 and FY2014 respectively. The earnings per share for full-year came at €5.61. The management proposed an annual dividend of €2.80. The considerable earnings increase in agricultural and chemicals solutions resulted in higher sales. However, the earnings in the Oil and Gas segment came lower due to a sharp decline in oil prices.
The management view
Dr. Kurt Bock, the Chairman of Board, said that the company achieves its goal for FY2014.The earnings increased despite the dismal economic activity in Europe. The company grew profitably and strengthened its chemicals division. It helped to enhance the profit margins in FY2014. The costs were under control, and it is an outstanding accomplishment of the entire team. The sales volume surged by 1% in 4Q. The group sales came at €18.0 billion compared to €18.1 billion in 4Q2013.
The segment performance
The Agricultural solutions and catalysts segment contributed to increase in sales. The positive currency impact failed to compensate for oil-price related drop in sales prices. The income from operations surged considerably by €40 million to €1.5 billion in 4Q2014. Sales volumes surged in all divisions in FY2014. Overall, volumes surged by 4%. The prices dropped by 3% due to a slump in oil and gas prices. The adjusted earnings for FY2014 came at €5.44 compared to €5.31 in FY2013. The dividend of €2.80 per share will represent an increase of 3.7% compared with FY2013.
Bock said that FY2015 can be a tough year due to uncertainties prevailing in the global economy. The raw material and oil prices are volatile. The currency is showing no signs of stability. Moreover, the global economy is adversely affected by geopolitical conflicts. EBIT is expected to remain flat in FY2015. The earnings will largely depend on the oil prices in FY2015.