BASF profits rise despite looming gas crisis

German chemicals giant BASF on Monday reported a rise in second-quarter profits, even as concern mounts over the possible impact on the sector of stoppages of deliveries of Russian gas.

BASF said in a statement that net profit rose to 2.1 billion euros ($2.1 billion) in the period from April to June from 1.7 billion euros a year earlier, according to preliminary figures.

The chemicals giant attributed the increase primarily to higher income from its shareholding in oil and gas company, Wintershall Dea, as energy prices have risen dramatically recently.

The Ludwigshafen-based group said its second-quarter sales were also up by 16 percent at 23 billion euros, despite falling volumes.

“Increased prices for raw materials and energy were largely passed on through higher selling prices”, BASF said.

Underlying or operating profit, was largely stable at 2.4 billion euros in the April-June period, the company said.

The favourable numbers come after the German chemical industry warned of the potentially existential consequences if Russia were to cut gas supplies completely.

On Monday, Russian energy giant Gazprom halted supplies to Germany via the Nord Stream 1 pipeline as it began maintenance work on the link.

But concern in Europe’s largest economy is widespread that the pipeline will not come back online after the service period, as relations between Russia and the West are at their lowest in years following the invasion of Ukraine.

A long-term shutdown would hit Germany hard, with authorities discussing the possibility of rationing supplies.

A complete end to supplies would amount to a “heart attack for the economy”, the head of the VCI chemicals industry federation, Christian Kullmann, told the Sueddeutsche Zeitung daily on Monday.

The chemicals industry is reliant on gas as an energy source and as a raw material in production.

“Without chemicals, this country would come to a standstill,” Kullmann said.

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