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BASF SE

Business strong in first quarter - BASF increases sales and earnings

Ludwigshafen, Germany (ots)

- Volume growth in all segments 
   - Chemicals activities improve significantly 
   - Cash flow increases further 
   - High raw materials have negative impact 
   - Outlook for full year 2004: Higher EBIT before special items   
     expected
BASF again showed that it can maintain a good course, even in
stormy economic weather. "We perform consistently thanks to our clear
strategy for long-term success, as demonstrated by the good start in
the first quarter of 2004," said Dr. Jürgen Hambrecht, Chairman of
the Board of Executive Directors of BASF Aktiengesellschaft when
commenting on the company's first-quarter figures at the Annual
Meeting on April 29, 2004.
Compared with the strong first quarter of 2003, sales increased by
2.5 percent. Sales growth was due to significantly higher volumes.
Overall, price levels are still unsatisfactory, although prices were
increased in individual product lines. Excluding negative currency
effects, sales climbed 8.4 percent.
Compared with the same period in 2003, earnings improved in all
segments with the exception of Oil & Gas. At EUR1,138 million, income
from operations (EBIT) before special items climbed 21 percent
compared with the strong first quarter of 2003.
Successful restructuring measures continued
Thanks to successful restructuring measures, significant cost
reductions were achieved, in particular in the Chemicals, Plastics
and Performance Products segments. In the Agricultural Products &
Nutrition segment, EBIT before special items improved further as a
result of higher sales volumes of crop protection products,
especially in South America. The Oil & Gas segment again made the
largest contribution to EBIT, although there was a sales related
decline in earnings because the price of oil was lower in euro terms.
Special items are related to restructuring measures that will be
implemented in the further course of the year, for example NAFTA
restructuring Phase II. EBIT after special items increased by over 10
percent to EUR1,038 million.
The financial result was minus EUR60 million compared with minus
EUR103 million in the first quarter of 2003. The interest result
improved in particular as a result of the lower level of net debt.
Income before taxes and minority interests increased by 17 percent to
EUR978 million.
The tax rate remained at the previous year's level of 44 percent.
In the first quarter, income taxes for oil production that are
non-compensable with German taxes were EUR138 million compared with
EUR161 million in the first quarter of 2003.
Net income rose 17% to EUR515 million. Earnings per share were
EUR0.93 compared with EUR0.78 in 2003.
Cash provided by operating activities rose 8 percent to EUR963
million. The higher level of net income contributed to this increase.
Despite the significant expansion of our business, additional
financing for net  working captial was below the previous year's
level.
Optimistic outlook for the full year 2004
"The first three months of 2004 offer grounds for confidence, even
though the first quarter is not generally representative of the
further course of the year because of seasonally higher contributions
from the Agricultural Products division and from the Oil & Gas
segment," said Hambrecht. BASF anticipates demand for its products to
remain strong. "Driven by the dynamically growing economies in the
Far East - especially in China - and by solid growth in North
America, we are seeing synchronized growth in the global economy for
the first time in years. All these factors are reflected in our order
books. Europe, and Germany especially, is sadly lagging behind," he
continued.
Although Hambrecht expects a negative impact on business due to
persistently high and volatile raw materials costs and a relatively
weak dollar, he remains optimistic with regard to his prognosis for
2004 overall: "I expect that we will achieve slightly higher sales
and increase EBIT before special items."
EBIT before special items increases in all regions
All regions reported an increase in EBIT before special items in
the first three months of 2004. In Europe, sales by location of
company increased by 1.5 percent in the first quarter. Sales rose in
all segments with the exception of Oil & Gas. EBIT before special
items climbed EUR63 million to EUR889 million.
Sales by location of company in the NAFTA region declined 2.1
percent. In dollar terms, sales increased by 14 percent, with all
segments contributing to this growth. The improved earnings situation
in the Chemicals and Agricultural Products & Nutrition segments led
to a significant increase in EBIT before special items, which rose by
EUR51 million to EUR80 million. BASF is not satisfied with this level
of earnings and will therefore continue to implement the measures it
has introduced to improve profitability.
In South America, first-quarter sales by location of company
increased in local currency terms by 39 percent, in particular due to
strong sales of crop protection products. EBIT before special items
more than doubled to EUR73 million.
In local currency terms, companies in the Asia, Pacific Area,
Africa region increased sales by 20 percent; all segments contributed
to this increase. EBIT before special items rose by EUR39 million to
EUR96 million.
BASF is the world's leading chemical company. Our goal is to grow
profitably and further increase the value of our company. We help our
customers to be more successful through intelligent system solutions
and high-quality products. BASF's portfolio ranges from chemicals,
plastics, performance products, agricultural products and fine
chemicals to crude oil and natural gas. Through new technologies we
can tap into additional market opportunities. We conduct our business
in accordance with the principles of sustainable development. In
2003, BASF had sales of more than EUR33 billion (circa $42 billion)
and over 87,000 employees worldwide. BASF shares are traded on the
stock exchanges in Frankfurt (BAS), London (BFA), New York (BF),
Paris (BA) and Zurich (AN). Further information on BASF is available
on the Internet at www.basf.com.
The following information can be found on the Internet at:
Forward-looking statements This release contains forward-looking
statements under the U.S. Private Securities Litigation Reform Act of
1995. These statements are based on current expectations, estimates
and projections of BASF management and currently available
information. They are not guarantees of future performance, involve
certain risks and uncertainties that are difficult to predict and are
based upon assumptions as to future events that may not prove to be
accurate. Many factors could cause the actual results, performance or
achievements of BASF to be materially different from those that may
be expressed or implied by such statements. Such factors include
those discussed in BASF's Form 20-F filed with the Securities and
Exchange Commission. We do not assume any obligation to update the
forward-looking statements contained in this release.
ots Original Text Service: BASF AG 
Internet: http://www.presseportal.de

Contact:

Michael Grabicki
Phone: +49 621 60-99938
Fax: +49 621 60-92693
michael.grabicki@basf-ag.de

Original-Content von: BASF SE, übermittelt durch news aktuell

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