Berlin - Saba:
German chemical company BASF warned on Friday that its profits for the current year will fall below expectations due to a decline in demand for chemicals resulting from new US tariffs.
The company expects operating profit before interest, taxes, and depreciation for the current year to range between 7.3 billion euros ($8.5 billion) and 7.7 billion euros, compared to previous forecasts of 8 billion to 8.4 billion euros.
At the same time, the company's sales declined by 2.1% in the second quarter of this year to 15.77 billion euros, while operating profit fell to 1.77 billion euros, compared to 1.96 billion euros during the same period last year.
BASF is among the industrial companies suffering from rising energy costs and weak demand, especially in China, which was previously a major source of profits.
German companies are particularly vulnerable to tariffs, as they rely on exports for a large portion of their sales.
BASF has previously warned that rising trade barriers could impact demand from sectors such as automotive and consumer goods. The company generates more than a quarter of its sales in North America.
This comes as the German company's CEO, Markus Cammett, is restructuring the company to focus on its core businesses in chemicals, industry, and food, while planning to sell assets in other areas, including agriculture and battery materials.
The company also plans to cut costs and has begun closing some smaller production units at its Ludwigshafen site, Europe's largest chemical plant.
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