BASF posted an 8% rise in sales for the full year 2008 to EUR 62.3 bln compared to last year as a result of higher pricing in all divisions. Income from operations (EBIT) before special items stood just under EUR 6.9 bln, a 10% decline from the record amount posted in 2007 due to a dismal fourth quarter. BASF's Plastics segment posted a 3% drop in full year sales particular due to negative currency effects while the lower volumes and margins in the Performance Polymers division coupled with reduced capacity utilization rates and writedowns on inventory in Q4 brought the earnings down for the segment. In fourth quarter alone, the segment's loss before special items stood at EUR 304 mln compared the profit of EUR 308 mln for same period previous year. The Chemicals segment clocked a 10% increase in sales compared with 2007 due to passing on considerably higher raw material prices. However, Income from operations declined driven by lower margins for cracker products as well as plant shutdowns due to the hurricanes in the United States and the significant decline in demand in the last quarter of 2008.
At year end, 2008, the company had an equity ratio of approximately 37%. The financial indebtedness of the Group stood at EUR 14.5 bln (57% of financial indebtedness was long-term debt) with a liquidity of EUR 2.8 bln. In order to maintain the company's long-term competitiveness, BASF announced it is ramping up its efficiency and restructuring programs including plant shutdowns, trimming capacities and job redundancies. In 2009, the group has proclaimed to shut less profitable plants including the coatings sites in the United States, Asia and Europe, and the plants for plastics precursors in Asia, which will cut employee count by 1500. Despite the acquisitions of Ciba and Revus Energy, BASF expects a decline in sales compared with 2008 and an even greater decline in income from operations, which will be negatively impacted by integration costs. The company nevertheless aims to at least earn its cost of capital and keep its dividend stable.