* Q2 adj EBIT up 5 pct but down when excluding oil unit
* Margins of complex specialty products squeezed by high costs
* Shares seen down 2.2 pct pre-market (Releads, adds analyst comment, premarket shares)
By Ludwig Burger
FRANKFURT, July 27 (Reuters) - BASF eked out a 5 percent gain in operating profit, thanks to an oil and gas unit that it is seeking to transfer into a joint venture and list separately, while high feedstock costs squeezed margins at its core specialty chemicals units.
Second-quarter earnings before interest and tax (EBIT), adjusted for one-offs, rose to 2.36 billion euros ($2.75 billion), the German chemicals giant said on Friday. That was a touch below average market estimates of 2.42 billion euros.
But excluding a forecast-beating earnings increase of more than 200 million euros at its Wintershall oil and gas division, operating income from its core chemicals products, which include vitamins, catalytic converters, engineering plastics and insulation foams, would have been down by 5 percent.
BASF’s more complex, specialty products - which new chief executive Martin Brudermueller pins his hopes on for more stable future growth - have suffered from higher costs of petrochemical precursor materials, which are expensive due to supply bottlenecks and strong industrial demand.
Baader Helvea analyst Markus Mayer said earnings at the group’s specialty chemicals and farm pesticides units were significantly below expectations, which have been stoked by strong growth at domestic rivals Evonik and Covestro .
The shares were seen 2.2 percent lower in early trades ahead of the 0700 GMT market open.
BASF said it was still aiming for an increase of up to 10 percent in group operating profit this year from the 8.33 billion euros posted in 2017.
Talks with Russian billionaire Mikhail Fridman’s Letter One investment company to merge BASF’s oil and gas division with rival DEA are progressing at a slower pace than initially planned. A signing in April was previously hoped for. ($1 = 0.8590 euros) (Reporting by Ludwig Burger Editing by Victoria Bryan)