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Wed, Aug 30, 2006 - Page 10 News List

Bayer's profits up by 11.3 percent in second quarter

AP , BERLIN

German chemical and drug maker Bayer AG said yesterday that its second-quarter net profit increased by 11.3 percent, helped by sales growth at its health care unit.

Bayer also announced a re-structuring plan for its CropScience unit that will lead to about 1,500 job cuts by the end of 2009, mainly in North America.

Leverkusen-based Bayer's net income for the April-June period was 452 million euros (US$578 million), up from 406 million euros a year earlier. That was slightly short of the 461 million euros analysts surveyed by Dow Jones Newswires had predicted.

Total sales rose by 5.8 percent to 7.07 billion euros from 6.69 billion euros. Bayer's core health care unit posted the strongest advance, with sales increasing by 12.7 percent.

Bayer has acquired fellow German drug maker Schering in a deal worth nearly 16.9 billion euros, aimed at strengthening the health care business and creating a "national champion."

Bayer included Schering data in its figures starting June 23, just before the quarter ended, and the Berlin-based company contributed 144 million euros to second-quarter sales.

Sales at Bayer's MaterialScience division also rose by 5.4 percent, but sales at CropScience, the company's crop protection unit, slipped by 1.6 percent. Bayer cited a "difficult market environment."

Bayer adjusted its full-year outlook to reflect Schering's inclusion, but excluded its diagnostics business, which it sold to Siemens AG in June. It expects higher operating profits this year.

Bayer raised its earnings target for its health care unit, saying it now expects underlying earnings before interest and taxes from continuing operations -- excluding Schering -- to grow by about 20 percent, compared with a previous forecast of more than 10 percent.

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