At BASF, 1992 group pre-tax profits tumbled more than 41 per cent to DM1.2bn (pounds 515m), a fall that followed a 23 per cent drop in 1991. Hoechst's group pre-tax profits were down 17.7 per cent at DM2.1bn against a 20 per cent fall the previous year.
However, BASF's performance, and in particular the unexpectedly small DM2 cut in its dividend to DM10, was better than expected, boosting its share price DM12 to DM241.
Hoechst cut its dividend by DM3 to DM9 a share, however. Bayer, Germany's third large chemical company, is also expected to reduce its payout by up to DM3 when it reports shortly.
Analysts said that although BASF was more vulnerable to the recession, it was able to cut its dividend less sharply than had been expected because of a favourable tax position.
Both companies' sales fell, though by proportionally less than profits, reflecting the increasingly slender margins in chemicals. Group sales at BASF dropped 4.5 per cent to DM44.5bn and at Hoechst 2.8 per cent to DM45.9bn.
At this stage the two companies reveal only bare profit figures. Details, together with their expectations for the year, will be disclosed later this month.
Jackie Ashurst, an analyst with the broker James Capel, said the outlook for plastics and petrochemicals remained bleak. 'The US recovery and cost-cutting should have some impact in the second half of this year, but European markets, especially Germany, are likely to stay very depressed until 1994.'
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