BASF reported a "significantly lower" level of sales volumes and earnings at its agricultural operations, blamed on seasonality trends in of acquired businesses, and dents from “trade conflicts” and weather.
The German-based chemicals giant said that its agriculturals solutions division, which has interests in seed research and digital farming, posted operating profits before special items of E121m for the April-to-June quarter - down 56% from E278m in the same period of 2018.
Although sales rose by 20% in the period, to E1.80bn this reflected, besides a small boost from currency effects, acquisitions last August from Bayer of operations in areas including non-selective herbicides and nematicide seed treatments.
Volume fall partly offset by prices gain
At an underlying level, volumes fell by 12%, a loss which was offset only in part by a 3% gain in prices.
BASF said: “Sales volumes were well below the prior-year quarter, mainly due to significantly lower volumes in North America,” where the group highlighted “lower fungicide and herbicide volumes”.
The regional decline was seen “especially in the United States and Canada due to distributor destocking and challenges relating to weather conditions and the trade conflicts”, with both countries in disputes with key agricultural commodity importer China.
The group flagged “severe weather conditions in North America” as a key earnings driver, with US wetness prompting severe delays to sowings of the likes of corn and soybeans, while dryness got crops off to a poor start in Canada Prairies.
Europe sales up
The company also reported a "significant" decline in fungicide, seed treatment and herbicide volumes in northern and eastern Europe, but said "portfolio effects ... more than compensated."
It said sales in South America, Africa, Middle East and East and Asia were "considerably" improved, with strong sales volumes in Brazil for seed treatments and fungicides.
The decline in agriculture profits helped drag group operating profits, excluding one-time factors, down 47% to E1.05bn. Group revenues fell by 4% to E15.16bn.
Adjusted earnings per share fell by 54% to E0.82.
Shares in the group fell 2.2% to E62.44 in afternoon deals in Frankfurt.