(Bloomberg) – BASF SE warned that uncertainty aroused by President Donald Trump's trade strategy means it cannot make reliable predictions for this year's business.
CFO Dirk Elvermann said on a call to discuss first-quarter earnings on Friday that BASF needs to decide in the second quarter whether to change its financial outlook.
“Currently, our forecast and outlook risks are greater than we did in the first three months,” Elfrman said. “The situation is very volatile.”
BASF shares fell as much as 2.6% in Frankfurt. The stock has fallen by about 11% over the past year.
Basf is one of the struggling industrial manufacturers, with high energy costs and increasing demand, especially in China, formerly profit-making drivers. German chemical manufacturers expect tariffs on exports in the coming months, which will worsen business conditions. BASF said the trade conflict could affect demand in industries such as automobiles and consumer goods.
“Future development will depend to a large extent on trade policy decisions by the United States and its trading partners,” BASF said in a statement. “The impact on the global economy cannot be reliably quantified at this time.”
BASF's earnings for interest, taxes and special items fell 3.2% to 2.63 billion euros ($2.97 billion) in the first quarter, and the company cited the weight of competitive pressure as the price of its products.
The company said that while the direct impact of U.S. tariffs on BASF may be limited because it is produced locally in North America, responsibilities have led to high uncertainty.
CEO Markus Kamieth is making improvements to BASF to focus on its major chemical, industrial and nutrition businesses, while planning asset sales in other sectors including agriculture and battery materials. The company plans to reduce costs and has started closing some of its smaller production units on its website, Ludwigshafen, Europe's largest chemical plant.
In February, BASF warned that it expects chemical sales to remain sluggish this year. Kamieth is expected to update investors at the company's annual shareholder meeting later on Friday.
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