BASF ( OTCQX:BASFY ) +2% in German trading Wednesday after saying it will implement a new cost-saving program worth €500M/year in 2023 and 2024, including job cuts, as the company took a €740M impairment on a partial writedown of its subsidiary Wintershall Dea's stake in the operator of the Nord Stream 1 gas pipeline.
BASF ( OTCQX:BASFY ) cited significantly weaker earnings in Europe due to "deteriorating framework conditions" and a Q3 loss in Germany as reasons for the cutbacks.
Q3 net income fell 27% Y/Y to €909M from €1.25B in the year-earlier period but revenues rose 12% Y/Y to €21.95B thanks to higher prices, although volumes fell; net profit was below the €1.11B analyst consensus estimate provided by the company, and while sales exceeded expectations of €21.08B.
The company said more than half of its near-term cost cuts will be carried out at its Ludwigshafen headquarters in Germany, hitting non-production areas such as services, research and development, and its corporate center.
While some cost savings will be implemented immediately, the company said others will be unveiled in Q1 2023, including re-evaluating its Verbund production strategy.
BASF ( OTCQX:BASFY ), however, said its full-year outlook was unchanged, including EBITDA of €6.8B-€7.2B.
BASF ( OTCQX:BASFY ) is "skillfully navigating headwinds" and has raised its outlook multiple times, Ellsworth Research writes in an analysis published on Seeking Alpha .
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BASF to launch cost saving plan after Q3 earnings fall more than forecast