Business development in the segments in the 2nd quarter
Sales in the Chemicals segment were €4.0 billion, down 8% compared with the second quarter of 2014. Lower raw material costs led to a sharp drop in prices, especially in the Petrochemicals division. Further dampening sales was the disposal of BASF's share in the Ellba Eastern Private Ltd. joint operation in Singapore at the end of 2014. Higher sales volumes in the Intermediates division and positive currency effects in all divisions partially offset this. EBIT before special items declined by €22 million to €548 million, primarily as a result of higher fixed costs arising from the gradual startup of new production facilities and a greater number of scheduled plant shutdowns. In the first half of 2015, sales fell by 10% to €7.8 billion. EBIT before special items grew by €103 million to €1.3 billion, primarily through the increased contribution from Petrochemicals.In the Performance Products segment, sales increased by 4% to €4.1 billion due to positive currency effects. Sales volumes declined slightly; this was mainly due to the unscheduled shutdown of a polyisobutene plant as well as weaker demand in the oilfield chemicals business in connection with the price of oil. The market environment for paper chemicals remained difficult. Furthermore, prices were negatively impacted by intense competition in the vitamin E business. The startup of new plants, reduction of inventory, and negative currency effects were largely responsible for an increase in fixed costs. EBIT before special items for the segment therefore declined by €131 million to €304 million. Sales in the first half of 2015 increased by 4% to €8.1 billion. EBIT before special items declined by €43 million to €819 million in the first six months, largely due to an increase in fixed costs.
In the Functional Materials & Solutions segment, sales exceeded the level of the second quarter of 2014 by 9% and reached €4.9 billion. Positive currency effects in all divisions were the decisive factor for this increase. Sales volumes matched the level of the previous second quarter, with prices slightly down. While sales volumes to the automotive and construction industry grew, they declined in precious metal trading. EBIT before special items rose by €102 million to €458 million, particularly through a strong contribution from the Performance Materials division. In the first half of 2015, sales increased by 9% to €9.5 billion. EBIT before special items improved by €222 million to €889 million, thanks mainly to the contribution from the Performance Materials division.
Second-quarter sales in the Agricultural Solutions segment rose by 1% to €1.7 billion in a challenging market environment. Positive currency effects and higher sales prices more than offset lower sales volumes. EBIT before special items nevertheless fell by €68 million to €365 million. Aside from the decrease in volumes, this was also a result of increased fixed costs from the startup of new plants. First-half sales in the Agricultural Solutions segment grew by 8% to €3.6 billion compared with the first half of 2014, despite a slight decrease in volumes. At €939 million, EBIT before special items reached the level of the previous first half.
Sales in the Oil & Gas segment grew by 15% to €3.7 billion compared with the second quarter of 2014. This was primarily attributable to sharply increased volumes in natural gas trading. The price of oil fell 44% in U.S. dollar terms, dampening sales. Also weighed down by oil price trends, EBIT before special items decreased by €115 million to €431 million. Earnings for the previous second quarter had included a contribution from offshore lifting in Libya. In the first half of 2015, sales rose by 16% to €8.7 billion. EBIT before special items declined by €144 million to €868 million. An improved earnings contribution from Natural Gas Trading was not able to fully offset the primarily oil price-related decrease in the Exploration & Production business sector.
At €757 million, sales in Other were down 11% compared with the second quarter of 2014. This was largely an effect of the lower plant availability resulting from the plant outage at the Ellba C.V. joint operation in Moerdijk, Netherlands, in addition to the disposal of BASF’s share in the Ellba Eastern Private Ltd. joint operation in Singapore. EBIT before special items improved by €265 million to minus €63 million. This improvement was especially due to the reversal of provisions for the long-term incentive program of around €170 million, due to the lower share price in the second quarter. The second quarter of 2014 and the first quarter of 2015 had included expenses for the recognition of provisions for this program. In the first half, sales in Other declined by 25% to €1.4 billion. EBIT before special items decreased by €145 million to minus €676 million.
