German chemical company BASF SE said Thursday it returned to profitability in the fourth quarter from a loss the previous year, the result of a major cost-saving program and improvements in the global economy, according to AP. BASF, based in Ludwigshafen, said it earned ¤455 million ($619 million) in the October-December period compared with a loss of ¤313 million in the fourth quarter of 2008. The news sent shares of BASF nearly 4.5 percent higher to ¤42.45 in Frankfurt morning trading. The company said revenue for the quarter declined nearly 8 percent to ¤13.2 billion from ¤14.3 billion in the final quarter of 2008. BASF, the world's largest chemical company by sales, said for the full year its net income declined more than 51 percent to ¤1.4 billion from nearly ¤3 billion in 2008. Revenue for 2009 fell 19 percent to almost ¤51 billion from ¤62 billion in 2008. BASF said it saw 2009 revenue decline in the chemicals, plastics, functional solutions and oil and gas divisions. Functional solutions makes construction, coating and catalyst chemicals. BASF also explores for and refines energy products. The agricultural solutions and performance products divisions, which makes pigments and paper chemicals, saw an increase in revenue. The chemicals, performance products, functional solutions and oil and gas divisions saw declines in pretax earnings for the year, while plastics, and agricultural solutions saw pretax earnings improve. BASF saw a dramatic drop in demand for its products in 2008 and 2009 but said it's seeing some recovery, especially in Asia. The company said that with quick and decisive measures it was able to stabilize and improve earnings for the year and forecast an improvement in 2010 sales and a significant improvement in earnings before interest and tax. In 2009 the company reported pretax earnings of ¤3.7 billion, 43 percent below the ¤6.5 billion in 2008. However, BASF said it would continue to implement restructuring programs. BASF did not mention job losses, but has said in the past it plans to cut thousands of jobs globally over the next three years as it integrates Swiss chemical company Ciba. BASF agreed to buy Ciba for $5.1 billion in 2008. «We have shown that we have the right strategy,» Chief Executive Juergen Hambrecht said in the report. «We are therefore confident that we will succeed in further strengthening BASF's leading position.» He said that the «slow recovery is continuing» and the «fourth quarter of 2009 was encouraging and gives us grounds for confidence. Overall, there are no signs of a self-sustaining, long-term recovery,» he said. Looking at 2010, BASF said it expects global industrial production to grow by just under 5 percent, but said it is seeing growth in many industries, especially the automotive, IT and electronics sectors.
