By Ed Frankl

BASF SE said Wednesday that it would put into action a new cost-saving program worth half a billion euros a year, as the outlook darkens on lower-than-expected third-quarter earnings.

The German chemical giant said its net income in the quarter to the end of September was 909 million euros ($882.3 million), down from EUR1.25 billion in the same period of 2021.

The on-year fall was due to non-cash impairments, BASF said, and below consensus expectations provided by the company of EUR1.11 billion.

Sales, however, increased by 12% to EUR21.95 billion on the back of higher prices, slightly above expectations of EUR21.08 billion.

BASF said it would implement a cost-savings plan worth EUR500 million annually in 2023 and 2024, as conditions deteriorate in Europe amid what it called significantly weaker earnings.

Operating, service and research and development divisions, as well as its corporate center, will be streamlined, with more than half the savings at its main base at Ludwigshafen in western Germany, it said.

While some cost savings that are possible in the short term will be implemented immediately, others will be announced in the first quarter of 2023, BASF said.

Employee representatives will be involved regarding the different measures, the DAX-listed company said.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

October 12, 2022 08:48 ET (12:48 GMT)

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