Advertisement
Advertisement

Bayer’s agriculture unit, consumer health drive outlook hike

By:
Reuters
Updated: Aug 4, 2022, 07:06 UTC

FRANKFURT (Reuters) - Agriculture and pharmaceuticals company Bayer on Thursday lifted its 2022 earnings guidance on strong demand from farmers for its seeds and crop chemicals and higher sales of consumer health products.

The historical headquarters of German pharmaceutical and chemical maker Bayer AG is pictured in Leverkusen

By Ludwig Burger and Patricia Weiss

FRANKFURT (Reuters) -Agriculture and pharmaceuticals company Bayer on Thursday lifted its 2022 earnings guidance on strong demand from farmers for its seeds and crop chemicals and higher sales of consumer health products.

Bayer is now targeting earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for special items, of about 13 billion euros ($13.21 billion), based on June 30 foreign exchange rates, where it had previously predicted about 12 billion euros, it said in a statement.

Bayer, which has been hit by litigation costs over claims that a weedkiller it acquired under its Monsanto takeover causes cancer, said that second-quarter adjusted EBITDA jumped 30% to 3.35 billion euros, above an average analyst estimate of 3.28 billion euros posted on the company’s website.

Prices of agricultural commodities, such as corn and soy have surged globally after Russia’s invasion of Ukraine disrupted farming and grain transport there, prompting farmers elsewhere to use more chemicals and seeds to boost output.

The crop science division, which generated the bulk of Bayer’s earnings during the first half of the year, saw adjusted EBITDA surge by more than 70% to 1.75 billion euros in the second quarter, beating a market consensus of 1.56 billion euros.

By contrast, a litigation settlement and write-downs resulted in a net loss of almost 300 million euros for the quarter, where analysts had projected a net profit of about 1.5 billion, hit by special charges of 2.1 billion euros.

That included 694 million euros set aside for an expected settlement with the State of Oregon over waste water contaminated with PCB, a chemical Monsanto produced up until 1977.

Other charges included restructuring measures and write-downs on certain assets due to a strong rise in interest rates.

($1 = 0.9842 euros)

(Reporting by Ludwig Burger, editing by Rachel More, Maria Sheahan and Tomasz Janowski)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement