Third-quarter earnings at chemicals manufacturer BASF SE soared to nearly euro1.25 billion ($1.7 billion) as revenue climbed by 23 percent in an improving global economy and the company benefited from lower taxes.
BASF said Thursday that profit was up from euro237 million in July-September 2009. The company said its tax rate was lower than in last year's third quarter largely because of a proportionally lower earnings contribution from the highly taxed oil and gas division.
"There was hardly any sign of the usual seasonal slowdown and the capacity utilization rate was high," BASF said in a statement, reporting earnings improvements across its divisions.
Revenue for the quarter rose to nearly euro15.8 billion from euro12.8 billion. BASF had already released that figure last week, when it also said it was raising its full-year outlook.
BASF now expects revenue this year of about euro63 billion and earnings before interest and tax, or EBIT, before special items, of more than euro8 billion.
"We expect to earn a high premium on our cost of capital and thus to increase the dividend," CEO Juergen Hambrecht said.
The company, based in Ludwigshafen, said in July that it expected to increase its sales for the full year and outpace global chemical production, and said pretax earnings should "improve considerably." Last year's revenue figure was nearly euro51 billion.
In the third quarter, EBIT before special items was up to euro2.21 billion from euro1.25 billion _ a 77 percent increase.
"We are now profiting from the favorable economic environment because we further improved our competitiveness in the crisis and made our portfolio even more cyclically resilient through the rapid integration of Ciba," a Swiss company whose acquisition BASF completed last year, Hambrecht said.
BASF said that rising sales volumes, higher and prices and positive currency effects drove a 44 percent increase in revenue at its chemicals division to euro2.87 billion.
Revenue at its plastics division rose 32 percent to euro2.6 billion as the usual summer slowdown in business with auto and construction industry customers largely failed to materialize, BASF said.
The oil and gas division was the only one that saw revenue decrease. It fell 6.7 percent to euro2.23 billion as a result of production restrictions in Libya and lower natural gas trading volumes.