Net Income from Shareholdings, Financial Result and Income After Taxes

  • Net income from shareholdings of –€909 million negatively impacted by impairments at the shareholding in Wintershall Dea
  • Earnings per share of –€1.15 after €9.17 in the previous year

At –€909 million, net income from shareholdings1 was €715 million below the prior-year figure. The decrease was primarily due to impairments of assets at the Wintershall Dea group, Kassel/Hamburg, Germany, in the amount of €791 million, mainly as a result of lower oil and gas price forecasts and changed reserve estimates. This reduced Wintershall Dea’s earnings contribution from –€86 million in the previous year to –€890 million. The contribution from Solenis UK International Ltd., London, United Kingdom, improved by €25 million year on year to –€46 million. Higher income from other shareholdings, primarily due to write-ups, had a positive impact on net income from shareholdings.

The financial result amounted to –€462 million in 2020, compared with –€705 million in the previous year.

The interest result improved by €92 million to –€373 million, due in part to lower interest expenses for financial indebtedness. The other financial result improved by €151 million to –€89 million, primarily driven by lower expenses in connection with bonds in foreign currency and the corresponding hedging instruments, as well as by lower net interest expenses from pension and similar obligations. Higher interest income on income taxes also contributed here.

Income before income taxes decreased from €3,302 million in the previous year to –€1,562 million in 2020, mainly as a result of the impairments described above.

The negative income before income taxes led to tax income of €91 million, after a tax expense of €756 million in 2019. As not all impairments were tax deductible, the BASF Group’s tax rate was only 5.8% in 2020 (previous year: 22.9%).

Income after taxes from continuing operations declined from €2,546 million to –€1,471 million. Income after taxes from discontinued operations decreased from €5,945 million in 2019 to €396 million in 2020. The 2020 figure includes the book gain of €358 million from the sale of the construction chemicals business and the income after taxes of the former Construction Chemicals division until November 30, 2020.2 This amounted to €38 million, €14 million above the figure for the full year 2019. In the previous year, income after taxes from discontinued operations included the book gain of €5,684 million on the deconsolidation of the Wintershall companies and their income after taxes until deconsolidation on April 30, 2019.

Noncontrolling interests generated income of €15 million, after expenses of €70 million in 2019. This was due to higher losses at BASF Petronas Chemicals Sdn. Bhd., Kuala Lumpur, Malaysia, as a result of impairments, as well as from lower earnings at BASF Total Petrochemicals in Port Arthur, Texas, owing to an unplanned outage of the steam cracker. The prior-year figure also included the shares in the gas transportation companies until deconsolidation on April 30, 2019.

Net income amounted to –€1,060 million, considerably below the prior-year figure of €8,421 million. This was primarily attributable to the impairments recognized in 2020 as described above. The prior-year figure included the book gain from the deconsolidation of the Wintershall companies. Earnings per share were –€1.15, compared with €9.17 in 2019.

1 To increase reporting transparency, as of January 1, 2020, companies accounted for using the equity method that are not an integral part of the BASF Group are classified as purely financial investments and presented under net income from shareholdings. For more information, see the Notes to the Consolidated Financial Statements.

2 The construction chemicals business was transferred in two steps, on September 30, 2020, and on November 30, 2020.