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By Ludwig Burger
(Reuters) -German chemicals group BASF stuck with its 2022 profit forecast on Friday, saying its pricing power meant it was able to pass on soaring raw material costs, though it warned of exceptionally high global uncertainty.
BASF, which released unscheduled preliminary first-quarter earnings this month, is targeting earnings before interest and tax (EBIT) adjusted for special items of between 6.6 billion and 7.2 billion euros ($7.57 billion), down from 7.8 billion euros last year.
It said its business could be hit by the fallout from Russia's attack on Ukraine and by measures in China to quell coronavirus infections, but for now its basic chemicals businesses were benefiting from higher margins bolstering earnings despite lower delivery volumes.
"The market environment continues to be dominated by an exceptionally high level of uncertainty," said the company, ahead of its annual shareholder meeting on Friday.
Chief Executive Martin Brudermueller said that while dependency on Russian natural gas needed to end, any sudden stop would cause "irreversible economic damage".
Moscow this week halted gas supplies to Bulgaria and Poland, stoking concerns that wider European natural gas needs are at risk.
The company moved this week to wind down its remaining business operations in Russia and Belarus by early July, excluding products for food production, in response to the war.
Earlier this month, BASF reported a drop in first-quarter net income from impairments at the oil and gas joint venture Wintershall Dea.
The charges stemmed from write-offs at majority-owned Wintershall Dea for funding that the oil and gas company provided to the abandoned Nord Stream 2 gas pipeline project.
Speaking at the AGM, Brudermueller said the initial public offering (IPO) planned for Wintershall Dea was off the table for now due to the joint-venture's exposure in Russia.[S8N2WO03P]
In February, BASF had signalled it was prepared to push through an IPO against co-investor LetterOne's will, even as markets were roiled by Russia's attack on Ukraine.
($1 = 0.9508 euros)
(Reporting by Ludwig BurgerEditing by Paul Carrel, Vinay Dwivedi and Elaine Hardcastle)