Overall sales revenue dropped 23 per cent to €12.2bn as the company struggled to adapt to what it called the “extremely difficult environment”.
The global manufacturing slump hit the chemicals and plastics divisions hard as the two segments recorded sales declines of 45 and 39 per cent respectively.
Care chemicals division
Even the care chemicals division suffered from sliding sales across its household, technical and personal care businesses.
BASF said significantly lower sales volumes in care chemicals were only partially offset by price increases.
In reaction to the poor sales figures BASF is pursing a number of avenues to cut costs and protect profits.
The company announced last week that at least 2,000 jobs are to go by the end of the year and that where necessary it will close or sell plants or sites that do not contribute to long-term competitiveness.
BASF has already taken steps to defend itself against the crisis. Inventories have been cut and production reduced to reflect lower demand.
“As early as the fourth quarter of 2008, we were one of the first companies in our industry to adapt our capabilities to the dramatic slump in demand and reduce costs on all levels in order to ensure profits and liquidity in the short term,” said BASF chairman Dr Jurgen Hambrecht.
Continued cost-cutting is anticipated as Hambrecht said there is currently “no sign of a turnaround”.
Looking ahead BASF does not expect sales growth in 2009 despite the acquisition of Ciba and Revus Energy. These acquisitions will have a positive impact on sales revenue but the integration costs will weigh heavily on profits.
BASF said substantial restructuring measures are urgently needed to ensure profitable growth from the Ciba – BASF union. The company said it aims to achieve synergies of 10 per cent of Ciba’s sales.