Outlook for full year 2014For 2014, BASF now expects weaker growth in the global economy than was foreseen six months ago. The weakness of relevant major currencies is an additional burden. The company has thus reduced some of its expectations for the global economy in 2014 (previous forecast in parentheses):
- Growth of gross domestic product: 2.5% (2.8%)
- Growth in industrial production: 3.7%
- Growth in chemical production: 4.4%
- An average euro/dollar exchange rate of $1.35 per euro ($1.30 per euro)
- An average oil price for the year of $110 per barrel
Nonetheless, sales are likely to decrease slightly compared with 2013, due to the divestiture of the gas trading and storage business, as well as to continuing negative currency effects. BASF expects a slight rise in EBIT before special items, especially as a result of considerably higher contributions from the Performance Products and Functional Materials & Solutions segments. EBIT is likely to increase considerably. Special income from the planned divestiture of the gas trading and storage business as well as from the divestiture of BASF's share in the Styrolution joint venture will make a significant contribution here.
BASF now expects the closing of the asset swap with Gazprom, agreed upon in December 2013, in autumn 2014 – still with retroactive financial effect from April 1, 2013. The transaction includes the divestiture of the gas trading and storage business.
- The complex legal unbundling process involving the establishment of new companies in Russia, the Netherlands and Germany is taking longer than initially anticipated - explained Dr. Hans-Ulrich Engel, Chief Financial Officer of BASF.