BASF’s first half agricultural sales were affected by the North American spring crop disruption, although overall results were lifted by its acquisition of Bayer Crop Science seed and crop protection assets last year.
The German multinational’s Agricultural Solutions division has reported an EBIT of $861 million on sales of $4.45bn in the six months ended June 30th 2019, compared to $701m and $3.23bn in H1 2018.
“The Agricultural Solutions segment recorded considerable sales growth compared with the second quarter of 2018,” notes BASF chairman of the board of executive directors Dr Martin Brudermüller. “This was primarily attributable to portfolio effects from the acquisition of significant businesses and assets from Bayer in August 2018. In addition, we achieved a slightly higher price level in the legacy business, with a 3% rise across the whole division. Sales were lifted 1% through by positive currency effects.”
But sales volumes were 12% below the prior-year quarter, mainly due to significantly lower volumes in North America. European sales increased “considerably” year on year, with the increased product portfolio more than compensating for a significant decline in fungicide, seed treatment and herbicide volumes in northern and eastern Europe.
By category, overall herbicide sales rose by 34%; fungicides by 28%; and insecticides by 9%; with a 23% increase in seeds & traits and 6% lift in seed treatments.
But the integration of the acquired Bayer businesses and assets led to some special cost items for the Agricultural Solutions segment.
Looking ahead, “the global economic risks have increased significantly during recent months,” warned Dr Brudermüller. “This has been driven by geopolitical developments and the ongoing trade conflicts between the United States and its trading partners. These conflicts will not be resolved in the near future and are causing a noticeable slowdown in macroeconomic growth around the world, particularly in China.”