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Bayer confirms year forecast despite sharp quarterly drop

German chemical and pharmaceutical giant Bayer yesterday reported an unexpected and sharp drop in quarterly profit and sales but confirmed its forecast for all of this year.

Third quarter net profit slumped 10.1 percent from a year earlier to 249 million euros (US$370 million), the aspirin-maker said in a statement.

Sales fell 7 percent to 7.39 billion euros in the three months to last month, it added.

Analysts polled by Dow Jones Newswires had forecast a 10 percent increase in net profit and a fall of 5 percent in sales.

“We are still adhering to our ambitious full-year forecast for the Bayer group,” chairman Werner Wenning said in a statement.

“We still expect to post full-year group sales of between 31 billion and 32 billion euros,” Wenning said.

In the third quarter, core earnings before interest and tax (EBIT) fell 6.1 percent to 837 million euros.

THREE DIVISIONS

The group’s three main divisions showed varying fortunes, with HealthCare posting a sales increase of 3.5 percent to 3.94 billion euros owing to strong sales of the cancer drug Nexavar and heart attack treatment Aspirin Cardio.

Levitra, a treatment for erectile dysfunction also sold particularly well, the company said.

Earnings reported by Bayer’s ­MaterialScience division, which produces high-tech materials for construction, were much better than in the second quarter, and at 238 million euros almost reached the year earlier level, the company said.

Year-on-year, however, sales were down 20 percent at 2 billion euros.

The weakest results were turned in by the CropScience division, which produces fertilizers and other products for the agricultural sector and which had helped support the group’s overall earnings until this quarter.

SALES

Sales there were down 8.7 percent at 1.14 billion euros, owing to “lower prices for key crop commodities, adverse weather conditions and higher trade inventories of crop protection products,” Wenning said.

Bayer’s debt stood at 10.7 billion euros as of Sept. 30, a decline of 1 billion euros from the previous quarter.

The group expected to take charges of 350 million euros in connection with restructuring programs by the end of the year but Wenning was upbeat about the near to medium-term prospects.

“In light of the portfolio realignment we have undertaken in recent years, we are confident about the ongoing development of our enterprise in the coming quarters,” he said.
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