Lower sales prices for vitamin C and the feed ingredient lysine ate into fine chemicals revenue at BASF during the third quarter, contributing to a 5 per cent decline in sales for this segment, despite gains in the pharma business.
The world's largest chemical company said that despite a 3 per cent rise in volumes, prices fell 5 per cent and currency exchange rates shaved off a further 3 per cent.
It has seen turnover in this division fall by 2 per cent during the nine-month period to €1.4 billion, although business with pharmaceutical active ingredients, cosmetic ingredients and aroma chemicals were said to have 'developed positively'.
EBIT before special items in this segment, part of the Agricultural Products and Nutrition unit that also makes fungicides, fell 65 per cent to €8 million. Earnings were further impacted by restructuring measures being carried out to reduce costs.
Higher research and development expenses were partly the reason why EBIT before special items was €15 million lower than in the previous year, said CFO Kurt Bock.
EBIT was negatively impacted by the sale of the Cramlington site, he noted, adding that to improve the earnings situation in this division, "we are proceeding with our program of capital expenditures and restructuring measures.
In September, BASF sold off the Cramlington facility as part of a management buyout that created a new active pharmaceutical ingredient (API) manufacturer, Aesica Pharmaceuticals.
Cumulative sales in the first nine months of 2004 amounted to €27.7 billion. This is an increase of more than 11 per cent compared with the same period of 2003. EBIT before special items in the first nine months climbed 55 per cent to €3.4 billion.