Germany stocks lower at close of trade; DAX down 1.75%

Investing.com -- German manufacturer, BASF SE (OTC:BASFY), is preparing for a potential listing of its agricultural chemicals division, according to Bloomberg, citing individuals familiar with the matter. Deutsche Bank AG (ETR:DBKGn) and Goldman Sachs Group Inc (NYSE:GS). are assisting BASF in readying the unit for a listing. The agrichemical business, which manufactures crop protection products such as herbicides and fungicides, could be valued at more than €20 billion ($22 billion) in a listing.

The company has stated its intention to complete the separation of the unit by 2027. Global coordinators, who will be responsible for underwriting the share sale, will be appointed at a later date. There are ongoing discussions, and it’s possible more banks could be involved in the future. Representatives from BASF, Deutsche Bank, and Goldman Sachs have declined to comment on the matter.

The company has been contemplating listing the agrichemical business in the US, but Germany is also being considered as a potential venue for the business. BASF’s Chief Executive Officer, Markus Kamieth, who assumed the role last April, has been restructuring the company to combat high energy prices and a decrease in global demand, especially from China.

In September, Kamieth announced new actions including preparing the agricultural unit for a possible listing and selling off its decorative paint business in Brazil. In February, BASF agreed to sell the Brazilian paints unit to Sherwin-Williams Co (NYSE:SHW). for $1.15 billion. The company is also in the process of preparing the sale of a separate coatings business.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Traton Group on Monday said it expects a sluggish truck market in 2025, forecasting a slight downturn in demand across its core regions, sending its shares down by over 3%.

The Volkswagen (ETR:VOWG_p) Group’s unit anticipates unit sales across all its brands could range between a decline of 5% and a growth of 5%, reflecting uncertainty in the global economic landscape.

The industrial vehicle manufacturer, which owns brands such as Scania, MAN, and International, projects that sales revenue will follow a similar trajectory, fluctuating within the same range.

The cautious outlook comes after a year of steady financial performance. In 2024, Traton increased its sales revenue by 1% to €47.5 billion, despite lower unit sales.

The company attributed this resilience to a favorable product mix, effective price management, and strong financial services growth. Adjusted operating return on sales improved to 9.2%, exceeding its own projections of 8.0% to 9.0%.

Christian Levin, CEO of Traton Group, acknowledged the challenges ahead, citing a potential slowdown in global economic activity. “We expect the global economy to lose some momentum in 2025. Against this backdrop, our diversified business model and the enhanced collaboration within the Traton Group will be key pillars of our success,” Levin said in a statement.

While Traton remains committed to its long-term strategy of electrification and sustainability, the immediate market conditions appear less promising.

The company projects an adjusted operating return on sales between 7.5% and 8.5% for 2025, signaling a likely dip from 2024 levels.

Traton’s brands reported mixed performances in 2024. Scania saw revenue grow to €18.9 billion, benefiting from strong demand in South America.

MAN, however, struggled with weaker demand in Europe, particularly in Germany, leading to a 17% drop in unit sales.

International, the North American subsidiary, increased revenue by 1% to €11.1 billion but faced declining new truck registrations and weaker demand for heavy-duty trucks.

Volkswagen Truck & Bus performed well, growing revenue by 18% and increasing unit sales by nearly a quarter.

Traton recognizes that geopolitical uncertainties, especially in the United States, could further affect business conditions.

Despite these challenges, the truck and bus maker remains committed to stability through cost control, cross-brand collaboration, and investments in sustainable transportation.

Investing.com -- LEG Immobilien (ETR:LEGn) reported its results on Monday, showcasing a stable performance amidst challenging market conditions.

The German residential real estate company said its net cold rent increased by 3.3% to €643.8 million, up from €623.5 million during the same period in the previous year.

The recurring net operating income (NOI) saw a 2.6% rise, reaching €530.3 million compared to €516.9 million in the prior year.

However, adjusted EBITDA saw a slight decline of 3.1%, amounting to €491.7 million, down from €507.3 million. Similarly, funds from operations decreased by 6.6% to €329.3 million, from €352.6 million in the previous year.

Despite these mixed results, LEG Immobilien maintains a robust balance sheet. Investment properties constitute 95% of the company’s total assets, and notably, the company does not recognize any goodwill in its financial statements.

According to analysts at J.P. Morgan, property values turned the corner in the second half of 2024, rising by 0.4%, which supported an EPRA Net Tangible Assets per share valuation of €125.9 (compared to J.P. Morgan’s estimate of €125.1).

Like-for-like rental growth continued at 3.4%, while the EPRA vacancy rate edged down to 2.3% in Q4 2024 from 2.4% in Q3 2024.

AFFO rose by 10.6% to €200.4 million, and the company sold approximately 2,500 apartments for €255 million to strengthen its balance sheet, achieving an overall book profit.

Net sales proceeds amounted to €180 million, while ownership transfer of an additional 1,800 units, valued at €150 million, is expected to generate €62 million in net sales proceeds and a book profit.

CEO Lars von Lackum emphasized a continued focus on a liquidity-oriented strategy during volatile times.

For the 2025 financial year, LEG forecasts AFFO between €205 million and €225 million, representing a midpoint increase of 7.3% over 2024’s AFFO of €200.4 million, driven primarily by improved operating earnings and better net interest income.

The company plans to invest €35 per square meter in its portfolio in 2025, exceeding the previous year’s level of €33.99 per square meter.

Analysts at Morgan Stanley have observed that LEG Immobilien continues to navigate the current economic landscape effectively, balancing growth with prudent financial management.

However, J.P. Morgan analysts noted that despite LEG’s solid fundamentals, broader macroeconomic factors could weigh on the stock’s performance.

The J.P. Morgan Rates Strategy team recently raised their end-of-year forecast for Germany’s 10-year yield to 2.40% from 2.05%, while the yield on LEG’s 2034 eurobond rose from 3.7% at the end of February to 4.3% last week.

As a result, renewed concerns around property values and long-term debt costs could keep investor interest on the sidelines for now.

On Friday, Porsche SE, the majority shareholder of Volkswagen (ETR:VOWG_p), announced an anticipated loss after tax of approximately 20 billion euros ($21.7 billion) for the year 2024. This projection is based on impairments related to its investment in Volkswagen, which were first made public in December. These impairments are a direct reflection of significant declines in the market value of both Volkswagen and Porsche AG. Currently, Porsche SE holds a 31.9% stake in Volkswagen and a 12.5% stake in Porsche AG.

The financial forecast for Porsche SE was previously uncertain due to Volkswagen’s challenges, which included disputes with unions concerning plant closures and wages. These issues had a substantial impact on Volkswagen’s annual planning and led Porsche SE to withdraw its profit outlook at that time.

Porsche SE is set to publish its complete annual financial results on March 26. The impairments on its holdings in Volkswagen and Porsche AG have been calculated at 19.9 billion euros and 3.4 billion euros, respectively. These figures are at the high end of the ranges that Porsche SE had previously communicated and are non-cash effective.

The company also provided an update on its financial position, forecasting a net debt of 5.2 billion euros by the end of 2024. Despite the anticipated loss, Porsche SE confirmed its intention to distribute dividends for the past fiscal year, although specific details regarding the dividend were not disclosed.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.