German chemicals giant BASF said Friday that its first-quarter business took a hit from low oil prices, but bottom-line profit increased nevertheless thanks to lower taxes.
BASF said in a statement that net profit rose by 18 percent to 1.4 billion euros ($1.6 billion) in the period from January to March.
But that was largely due to a much lower tax rate in the three-month period, BASF explained.
Underlying or operating profit declined by six percent to 1.9 billion euros and revenues dropped by 29 percent to 14.2 billion euros, BASF said.
This was “largely on account of the divestiture of the gas trading and storage business,” the statement said.
“The lower price of oil led to declining sales prices, especially in the chemicals segment,” even if in volume terms, sales matched the level of the previous first quarter.
Looking ahead to the whole of 2016, BASF said it “anticipates a continuation of the currently challenging conditions along with substantial risks.”
Nevertheless, chief executive Kurt Bock said the group was sticking to its full-year sales and earnings forecasts.
“We confirm our outlook for the full year,” he said.
“We aim to increase sales volumes in all segments,” but revenues would decline “considerably, especially as a result of the divestiture of the gas trading and storage business as well as lower oil and gas prices,” the CEO said.
Underlying profit would also be “slightly below 2015 levels.”
“This is an ambitious goal in the current volatile and challenging environment, and is particularly dependent on oil price developments,” Bock said.