FRANKFURT, Germany (AP) — Chemical company BASF said its ability to raise prices helped boost net profits by 22 percent in the second quarter from a year ago, but that its sales growth would slow in the second half of the year.
BASF's shares dropped sharply Thursday as profits fell short of stock market predictions and the company warned over its second half prospects.
BASF shares were down 5.8 percent at euro62.01 in morning trading Germany.
BASF's net profit of euro1.45 billion ($2.08 billion) was below expectations of euro1.53 billion.
Meanwhile, sales rose 14 percent to euro18.4 billion.
BASF, whose businesses include plastics, industrial and farm chemicals and oil and gas, said it was able to increase prices in its chemicals and plastics divisions and still boost sales, thanks to strong demand.
"We were largely able to compensate for the sharp rises in raw materials costs since the start of the year with price increases in nearly all divisions," the company said in a statement.
Sales rose in all its regions: Europe, North America, Asia-Pacific, and South America, Africa and Middle East.
The company warned however that the pace of growth would slow in the second half of the year and that demand from the company's customer industries would "stabilize at a high level."
The company has had to suspend oil production in Libya due to the fighting there and doesn't think it will resume this year. Operating earnings from oil and gas dipped 35 percent to euro332 million.