The German chemicals giant said in a statement on Friday that 2023 earnings before interest and tax (EBIT), adjusted for special items, would fall to between 4.8 billion euros ($5.09 billion) and 5.4 billion from 6.9 billion in 2022, which was down 11.5% from 2021.
BASF, which in October laid out plans to cut annual non-production costs in Europe by 500 million euros, said on Friday that this would translate into about 2,600 job cuts, or about 2.3% of its global workforce. About 1,800 of the job losses will be at its Ludwigshafen headquarters.
It also announced plans to cut another 200 million euros in annual fixed production costs.
A share buyback programme, with 3 billion euros earmarked early last year, will be stopped after 1.4 billion euros was spent on its own shares due to “profound changes in the global economy”, it added.
Shares in the company slumped 6.4% to their lowest in almost two months as per 1000 GMT, the worst performer on Germany’s blue-chip DAX 30 index
BASF’s job cuts, which are about 3.9% of its European workforce, come after carmaker Ford last week said it would slash 3,800 roles in Europe. Hit by a product recall, Dutch medical device company Philips last month announced it would scrap another 6,000 jobs.
But cushioning the impact on workers, BASF added it would strive to offer affected staff other internal positions that will become vacant. It has previously flagged the risk of major labour shortages as baby boomers retire in Germany.
European natural gas prices soared last year after Moscow’s invasion of Ukraine, which started a year ago. Although European prices have eased to around 50 euros per megawatt hour (MWh) from last August’s peak of more than 340 euros, they remain above historic averages.
“Given that energy prices are likely to remain at high levels for a long time, major challenges continue to lie ahead for the company, and difficult times for shareholders,” said Juergen Molnar, capital markets strategist at brokerage RoboMarkets.
BASF last month announced a 7.3 billion euro writedown for 2022 because its Wintershall Dea energy business had to pull out of Russia.
But a downward revision of that impairment resulted in a group net loss for the year of 627 million euros, down from January’s preliminary figure of 1.38 billion euro.
Several production lines would also be shuttered at its Ludwigshafen headquarters, home to its largest chemical complex with about 39,000 staff.
This includes the closure of one of two ammonia plants there. Ammonia, among the most gas intensive products in the chemical industry, is used in products such as engineering plastics and diesel exhaust cleaning fluid but BASF said customer demand would still be met.
BASF, which 90 years ago invented large-scale production of ammonia, sold European fertiliser-related ammonia production to EuroChem in 2012.
But for now it is one of the largest ammonia producers in Germany, alongside Yara and SKW Piesteritz.
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