FRANKFURT, July 9 (Reuters) - German chemicals giant BASF’s shares fell 7.2% in early Frankfurt trading on Tuesday after the company warned that its adjusted operating profit will drop 30 percent this year, blaming a global trade war.
The company mainly blamed a global economic slowdown and trade war between the United States and China for worse-than-expected results.
“Everybody expected a warning. But not to that extent. ...Really disastrous numbers,” said a trader.
The maker of petrochemicals, coatings, catalytic converters and foams warned full-year earnings before interest and taxes (EBIT) excluding special items would fall up to 30% below 2018 levels, instead of showing modest growth.
Sales are now expected to fall in 2019 rather than rise, the company said.
Shares in sector peers Covestro and Lanxess also fell in sympathy.
German chemicals industry association VCI last week had warned of falling revenues on slower economic growth, weakening industrial activity and uncertainty caused by global trade conflicts. (Reporting by Vera Eckert and Hakan Ersen, editing by Edward Taylor)
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