BASF (BAS.DE), the world’s largest chemicals maker, has lifted its earnings guidance for the third time on the back of higher chemical prices.
The German firm increased its outlook for this year, saying that its large industrial customers accepted marked-up prices for basic chemicals amid ongoing shortages.
It now expects 2021 earnings before interest and tax to come in at between €7.5bn (£6.3bn, $8.7bn) and €8bn, compared to the previous €7bn to 7.5bn forecast.
During the third quarter, adjusted operating earnings jumped to €1.87bn, up from €581m in the pandemic-stricken prior year, beating the €1.8bn expected by analysts.
BASF also posted a 42% surge in group revenues to €19.7bn, driven by the price increases, which offset a slowdown in demand due to the semiconductor shortage in the automotive industry.
“Growth momentum slowed compared with the previous quarter due to supply bottlenecks in many value chains of the manufacturing sector,” the company said.
It comes just days after the group revealed a partnership with Chinese battery manufacturer SVolt to develop battery materials.
The partnership is focused on the development of cathode active materials, as well as raw materials supply and the recycling of battery cells from SVolt.
BASF recently agreed to work with battery manufacturer CATL, and also formed a joint venture with supplier Shanshan for battery materials. It expects its battery materials business to generate more than €1.5bn in sales by 2023 and more than €7bn by 2030 as electric vehicle production surges.
Last month, BASF also announced that it was curtailing ammonia production at sites in Germany and Belgium on the back of surging natural gas prices. Ammonia is the key feedstock to produce fertiliser.
It uses gas to produce electricity and steam in its combined heat and power plants, as well as a feedstock to produce ammonia, acetylene, and hydrogen.