BERLIN - Germany's BASF SE said Thursday the suspension of oil production in Libya pushed down in its third-quarter earnings, although the chemical company reported a healthy overall rise in revenue and said it was able to pass higher costs for raw materials on to customers.
BASF restarted oil production in the Libyan desert in mid-October after a roughly six-month shutdown forced by fighting in the country. It said production is currently being ramped up but it can't say when it will be restored in full.
The company reported third-quarter net earnings of €1.19 billion ($1.66 billion). That was down 4.3 per cent from last year's July-September profit figure of €1.25 billion, but it was better than analysts' forecast of €1.17 billion.
Earnings before interest and taxes, before special items, dropped 11.3 per cent to €1.96 billion from last year's €2.21 billion. BASF said the 2010 figure included a contribution of €355 million from oil production in Libya.
BASF says it now has a production capacity in Libya of 20,000 barrels a day and it isn't yet possible to say when it will reach its maximum daily production capacity of 100,000 barrels.
"As soon as enough crude oil has been collected in the fuel storage facilities, it will then be transported via ship," the company said. "Earnings will only be achieved once this has taken place — probably toward the end of the year."
BASF has joined companies such as Italy's Eni and France's Total in resuming production after Libya's civil war ended with the ouster of longtime leader Moammar Gadhafi.
Based in Ludwigshafen, Germany, the company makes a wide range of chemical-based products. It said Thursday that its overall quarterly revenue was up 11.6 per cent to €17.6 billion from last year's €15.8 billion.
It said it was able to pass on sharply increased costs for raw materials in its prices. Cognis, a specialty chemicals firm acquired last year, made a "strong contribution" to sales growth, the company said.
BASF said demand remained high although growth "slowed further as expected" compared with the year's first half.
Amid global economic uncertainty, it said customers were planning more cautiously, reducing inventories, and to some extent delaying orders in expectation of possible price declines.
"We remain cautious despite the current good performance as economic growth is likely to slow further," weighed down by debt worries in Europe and the U.S. and by credit restrictions in China, CEO Kurt Bock said.
He said BASF remains "committed to further reducing costs and increasing efficiency" and expanding business in emerging markets.
BASF's net earnings for the year's first nine months were up 46 per cent, rising to €5.06 billion from €3.46 billion. Revenue climbed 16.8 per cent to €55.43 billion from €47.45 billion.
BASF shares were up 3.5 per cent at €52.37 in Frankfurt — slightly outpacing the overall rise of the DAX index of blue-chip stocks.