Dynamic BASF on course for profitable growth

¡¡¡¡The Chemical Company ¡§C has completed the first half of 2006 with record results, and again exceeded the previous year's very strong results.
    Second-quarter sales climbed 16 percent to €12.3 billion and income from operations (EBIT) before special items rose 15 percent to €1.9 billion.Cumulative sales in the first half of 2006 amounted to almost €25     billion, or 20 percent more than in the same period of the previous year. Compared with the first six months of 2005, BASF increased EBIT before special items by 17 percent to approximately €3.8 billion.
     At the same time, BASF reached important milestones on its path to profitable growth in the first six months. Key events were the purchase of Degussa's construction chemicals business, the takeover of Engelhard Corporation and the acquisition of Johnson Polymer and CropDesign. ¡ãThese portfolio expansions are important elements of our strategy of making BASF even more resilient to cyclicality. The integration of the new      "businesses is proceeding smoothly," said Dr. J¡§1rgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft, in his presentation of BASF's results for the second quarter and first half of 2006.
     The business environment was favorable for BASF in the first half. The economic situation has improved, and the outlook seems positive. Asia is growing rapidly, especially China, India and Korea. The economic climate is stable in the United States, and domestic demand is on the upturn in Europe, and, in the meantime, in Germany. There are virtually no signs of the usual summer lull. Volume demand for BASF's products remained strong.
     Risks, however, remain in the form of persistently high oil prices, and geopolitical tensions ¡§C in particular in the Middle East ¡§C are making the markets jittery. Record costs for raw materials have further increased the pressure on the company's margins. Sales prices increases were therefore necessary in many product lines. Price increases to reflect rising costs will also be necessary in the future.