BASF 2025 EBITDA drops 9.5% as chemicals weaken, capex cuts lift FCF

BASF SE, the German chemicals giant, reported a 9.5% drop in full-year 2025 earnings before interest, tax, depreciation and amortization on Friday, as its core chemicals business nearly broke even in the fourth quarter, prompting the company to rely heavily on capital expenditure cuts to boost free cash flow. The performance reflects ongoing challenges in the global chemicals sector, where pricing pressures and demand uncertainties have persisted throughout the year. The company's financial results highlight a difficult operating environment, with the core chemicals segment struggling to maintain profitability despite various cost optimization measures. By reducing capital expenditures, BASF managed to improve its free cash flow position, demonstrating a strategic shift toward financial discipline amid industry-wide headwinds. This approach allowed the company to weather the downturn while maintaining its operational capabilities for future growth.