German chemical conglomerate BASF announced on Tuesday that its annual profits had taken a serious tumble in 2018.

The major fall came in the fourth quarter with a nearly 60 percent drop in operating profit due to a sharp decline in earnings at its basic petrochemical-making unit. Fourth-quarter group earnings before interest and tax plunged 59 percent to €630 million ($715.37 million)

Overall for 2018, BASF's profits fell 22.6 percent to €4.7 billion, well below market expectations.

The Ludwigshafen-based firm said it was facing the domino effects from global trade conflicts and a slowdown in auto sales linked to new emissions' standards in Europe.

"2018 was a year characterized by difficult global economic and geopolitical developments and trade conflicts," the company said in a statement.

"Slowdown in key markets, especially the automotive industry" had hindered growth, BASF said, adding that the trade war between Beijing and Washington had exacerbated the problem.

Dry rivers impede deliveries

Another issue was the low levels of water on the Rhine river due to climate change.

"For much of the third and fourth quarter, it was nearly impossible to receive deliveries of raw materials via ship" after Germany suffered one of its worst heat waves in history in the summer of 2018.

"We are tackling these challenges," said CEO Martin Brudermueller. "We will use 2019 as a transitional year to emerge even stronger. This year, we are adapting our structures and processes, and focusing our organization clearly on the needs of our customers."

es/jm (AFP, dpa)

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