BASF Slashes Future Dividends Amid Weak Demand

By Ludwig Burger and Patricia Weiss

(Reuters) – German chemicals giant BASF announced on Thursday significant cuts to its planned dividends for 2025 and the following three years, aiming to preserve cash amid weak demand in Europe. The proposed annual dividend will be at least 2.25 euros ($2.51), a reduction from the 3.40 euros ($3 billion total) distributed this year, consistent with the previous two years.

Previously, BASF maintained a dividend policy of keeping or improving payouts each year. CEO Markus Kamieth, who took over in April, is continuing efforts to cut over 2 billion euros in annual costs in Europe and reduce dependence on soft market conditions.

Meanwhile, BASF is in the costly phase of constructing a 10-billion-euro chemical complex in China. To offset the declining dividends, plans for share buybacks totaling around 4 billion euros by 2027 are in place.

The company is committed to a combined distribution to shareholders—dividends and share purchases—of at least 12 billion euros through 2028, maintaining consistency with prior years. Investment in plants and equipment will see reductions beginning in 2026, with the Zhanjiang site in China expected to be largely completed by 2025.

BASF anticipates 2028 earnings before interest, taxes, depreciation, and amortization (EBITDA) before special items between 10 billion and 12 billion euros, contingent on favorable business conditions. Analysts, on average, project an EBITDA of approximately 11 billion euros by 2028, up from an adjusted 7.7 billion last year.

As of 0926 GMT, BASF shares fell 3% to 43.96 euros. Analysts at Jefferies expressed concern that the reliance on mid/upcycle conditions, combined with the depth of the dividend cuts, may disappoint investors.

Additionally, BASF confirmed that it is preparing to divest its decorative paints business in Brazil and plans a partial listing for its agricultural chemicals unit, exploring new ownership options for its coatings division. “The company is targeting readiness for a potential IPO. In the midterm, listing a minority share in the agriculture unit is an option,” BASF stated.

($1 = 0.8965 euros)