The release of BASF’s final figures for the 2025 fiscal year confirms the mixed performance previewed earlier this year. A standout surge in free cash flow has provided a bright counterpoint to ongoing pressures within the chemical giant’s core operations. Market participants are now assessing whether the company’s accelerated restructuring and potential regulatory shifts in emissions trading can offset its fundamental challenges.
A Surge in Liquidity Offsets Earnings Pressure
Delving into the financial statements reveals a company navigating a complex landscape. BASF reported sales of €59.7 billion and EBITDA before special items of €6.6 billion, falling short of its initial targets. A difficult market environment and declining prices significantly eroded profitability.
However, Chief Financial Officer Dirk Elvermann delivered a compelling bullish case separate from the operational struggles. Free cash flow surged to €1.3 billion, dramatically exceeding analyst consensus estimates of approximately €0.6 billion. This achievement was driven by stringent capital discipline, with investments slashed to €4.3 billion from €6.2 billion the previous year. Furthermore, the net result also surpassed forecasts, bolstered by income from the Wintershall Dea stake.
Should investors sell immediately? Or is it worth buying BASF?
Restructuring and Regulatory Catalysts
The group’s transformation is leaving a marked imprint on its accounts. Substantial restructuring charges weighed on EBIT, which came in at €1.6 billion. Management emphasized that its cost-saving initiatives are taking effect faster than anticipated—a crucial development in an industry grappling with global overcapacity and trade disputes.
The equity currently enjoys additional tailwinds from Brussels. Recent calls by the Italian industry minister to suspend the European Emissions Trading System (ETS) have fueled positive market sentiment. This is a pivotal lever for BASF; CEO Markus Kamieth recently warned that without reforms, the cost of CO₂ certificates could breach the billion-euro threshold in the future. Any political relief in this area would directly improve the company’s margins.
A Solid Foundation for Transition
BASF presents a picture of a corporation in transition. While its operational foundation shows weakness, its financial discipline is robust and the balance sheet remains solid—a point underscored by Fitch’s confirmation of its ‘A’ rating. Investors have responded favorably to the combination of cash flow strength and regulatory optimism: shares closed yesterday at €49.65, posting a weekly gain of 1.64 percent. The key question for the future is whether the sharp reduction in capital expenditure will impede long-term growth, or if the ongoing streamlining will sustainably secure profitability.
Ad
BASF Stock: Buy or Sell?! New BASF Analysis from February 28 delivers the answer:
The latest BASF figures speak for themselves: Urgent action needed for BASF investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 28.
BASF: Buy or sell? Read more here...
