2.3 – Joint Ventures and Associated Companies

BASF has shareholdings in two material joint ventures.

Wintershall Dea GmbH, Kassel/Hamburg, Germany, is jointly operated by BASF and LetterOne. BASF holds a 72.7% share in the company’s equity. The joint venture became effective on May 1, 2019 and is accounted for using the equity method. The company is considered a joint venture because BASF and LetterOne defined the decision-making processes in the governing bodies as such that neither party alone can control the relevant activities of Wintershall Dea.

The following table shows values for the Wintershall Dea group, Kassel/Hamburg, Germany, including adjustments for fair value made at initial recognition and the resulting effects on earnings.

Financial information on the Wintershall Dea group, Kassel/Hamburg, Germany (100%) (Million €)

 

2019

Balance sheet

 

Noncurrent assets

31,920

of which goodwill from fair value adjustments

2,688

Current assets

2,589

of which marketable securities, cash and cash equivalents

814

Assets

34,509

 

 

Equity

17,058

Noncurrent liabilities

15,273

of which financial indebtedness

6,028

Current liabilities

2,178

of which financial indebtedness

576

Total equity and liabilities

34,509

 

 

Statement of income from May 1, 2019 to December 31, 2019

 

Sales revenue

3,272

Depreciation and amortization

(1,544)

Interest income

75

Interest expenses

(68)

Income taxes

(286)

Total comprehensive income

(187)

 

 

Carrying amount according to the equity method as of May 1, 2019 (initial recognition at fair value)

14,078

Proportional comprehensive income

(136)

of which proportional net income

(86)

Capital measures/dividends/changes in the scope of consolidation/other adjustments

(1,541)

of which dividends

Carrying amount according to the equity method as of December 31, 2019

12,401

BASF-YPC Company Ltd., Nanjing, China, in which BASF and Sinopec each has a 50% share, operates the Verbund site in Nanjing.

Financial information on BASF-YPC Company Ltd., Nanjing, China (100%) (Million €)

 

2019

2018

Balance sheet

 

 

Noncurrent assets

1,032

1,110

Current assets

768

932

of which marketable securities, cash and cash equivalents

148

201

Assets

1,800

2,042

 

 

 

Equity

1,542

1,691

Noncurrent liabilities

3

29

of which financial indebtedness

0

28

Current liabilities

255

322

of which financial indebtedness

28

92

Total equity and liabilities

1,800

2,042

 

 

 

Statement of income

 

 

Sales revenue

2,536

2,764

Depreciation and amortization

209

206

Interest income

3

5

Interest expenses

4

6

Income taxes

71

112

Income after taxes

212

343

 

 

 

Carrying amount according to the equity method as of the beginning of the year

847

879

Proportional income after taxes

106

171

Proportional change of other comprehensive income

(6)

Total comprehensive income

106

165

Capital measures / dividends / changes in the scope of consolidation / other adjustments

(181)

(197)

of which dividends

(200)

(197)

Other adjustments to income and expenses

Carrying amount according to the equity method as of the end of the year

772

847

Non-material joint ventures accounted for using the equity method include, in particular:

  • Heesung Catalysts Corporation, Seoul, South Korea, which is jointly operated with the partner, Heesung (BASF interest: 50%)
  • N.E. Chemcat Corporation, Tokyo, Japan, which is jointly operated with the partner, Sumitomo Metal Mining Co. Ltd. (BASF interest: 50%)
Non-material joint ventures accounted for using the equity method (BASF interest) (Million €)

 

2019

2018

a

This item includes accumulated effects from the discontinued oil and gas business in the amount of €12 million in 2018.

b

In 2018, the amount of €939 million was transferred to the assets of the oil and gas disposal group.

Carrying amount according to the equity method as of the beginning of the year

553

1,509

Proportional income after taxesa

98

106

Proportional change of other comprehensive income Equity

1

16

Total comprehensive income

99

122

Capital measures/dividends/changes in the scope of consolidation/other adjustmentsb

(94)

(1,054)

Other adjustments to income and expensesa

(21)

(24)

Carrying amount according to the equity method as of the end of the year

537

553

Non-material associated companies accounted for using the equity method include, in particular:

  • Solenis UK International Ltd., London, United Kingdom (BASF interest: 49%)
  • Stahl Lux 2 S.A., Luxembourg (BASF interest: 16.32%) is classified as an associated company as BASF can exercise significant influence over the company due to the fact that its approval is required for certain relevant board resolutions
  • Yara Freeport LLC, Wilmington, Delaware (BASF interest: 32%)
  • BASF Huntsman Shanghai Isocyanate Investment B.V., Arnhem, Netherlands (BASF interest: 50%)
Non-material associated companies accounted for using the equity method (BASF interest) (Million €)

 

2019

2018

a

This item includes effects from the discontinued oil and gas business in the amount of €87 million in 2018.

b

In 2019, the shareholding in Solenis UK International Ltd. was recognized for the first time, in the amount of €590 million. The amount of €65 million was transferred to the assets of the disposal group for the pigments business. In 2018, the amount of €1,613 million was transferred to the assets of the disposal group for the oil and gas business.

Carrying amount according to the equity method as of the beginning of the year

803

2,327

Proportional income after taxesa

22

115

Proportional change of other comprehensive income Equity

(16)

11

Total comprehensive income

6

126

Capital measures/dividends/changes in the scope of consolidation/other adjustmentsb

492

(1,650)

Other adjustments to income and expenses

(3)

Carrying amount according to the equity method as of the beginning of the year

1,298

803

As of August 31, 2019, 70% of the carrying amount of CIMO Compagnie industrielle de Monthey S.A., Monthey, Switzerland (BASF interest: 50%), was reclassified to assets of the disposal group for the pigments business. This represents the 35% interest of BASF Colors & Effects Switzerland AG in the company.