Vitamin price drops but BASF nutrition sees 4% sales growth

BASF’s nutrition and health unit (N&H) earned €492m in Q3 – 4% more for the quarter than in 2011 when it had sales of €471m – despite falling prices for most vitamins.

The unit contributed just over 10% of the €4.015bn quarterly revenue for the Performance Products division that includes care, paper and performance chemicals.

For the first three quarters of year the N&H unit grew sales 4% on 2011 to €1.477bn with Performance Products overall 9-month revenues at €12.136bn. For the same period the whole BASF group had sales of €59.081bn – up 6.6% on 2011.

But profits after extraordinary items were removed dropped 21% for the Performance Products division, from €403m to €325m for the quarter, and 10% from €1.266bn to €1.136bn for the three quarters to September.

We increased sales in the Nutrition & Health division, mainly owing to positive currency effects and demand-driven higher sales volumes in almost all business areas,” BASF said.

Lower sales prices for vitamins, however, had a negative impact on sales and earnings. Increased raw material costs could only be partly passed on to the market, putting pressure on margins. Earnings were therefore significantly below the good level of the previous third quarter.”

But the company did not reveal the specific earnings for the N&H unit.

More broadly, chief executive Kurt Bock singled out the economic downturn and slower Chinese activity as major impacts on the German giant’s business.

“In the past quarter, the outlook for the world economy has once again not improved and the uncertainty on the international capital markets continues,” Bock said.

“In China, growth in the third quarter of 2012 has slowed once again compared with the same quarter of the previous year. We see stabilisation at the current level in China, but no visible upturn.”

The company was not available for further comment at the time of publication.

BASF bolstered its N&H division significantly at the end of 2010 when it bought Cognis for about €3bn.