Bayer is down on net profits in the first half -
German chemical and pharmaceutical group Bayer reported a 16.8% drop in net profit in the first half of the year, amounting to EUR 2,753 million due to the acquisition of Monsanto and the divestment of plastic producer Covestro.
Bayer reported today that operating profit (EBIT) fell by 5.9% (3,661 ME) in the same period, with a growth of 1.2% in turnover (18,619 ME).
"We are on the right track to reach the annual targets," Bayer president Werner Baumann said in the semiannual balance sheet presentation.
On June 7, Bayer closed US $ 63 billion (54,310 ME) of the US producer of transgenic Monsanto, including its debt.
"The acquisition of Monsanto brought together two strong businesses that complement each other: the innovative portfolio of plant chemicals and biologicals and Monsanto's extraordinary knowledge of seeds and plant properties," said Bauman.
"We are now a leading company in the agricultural sector," added the Bayer president.
Exchange rates in the second quarter of 2018 had a negative effect of EUR 130 million on Bayer's results.
The purchase of Monsanto also generated extraordinary expenses of 363 ME in the second quarter and 441 ME in the first half.
Net income decreased 34.7% (799 ME) in the second quarter because Covestro no longer contributed to the result.
The level of indebtedness, at the end of June, reached 44,697 ME due to the purchase of Monsanto.
The pharmacy department reduced operating profit by 4.5% (2,216 ME) between January and June, on non-prescription drugs, food supplements.
Body care products fell by 22.2% (368ME); agricultural products also declined (3.8%) while veterinary substances increased by 5.2% (245 ME).
Bayer expects a turnover of 39,000 ME in 2018, with Monsanto accounting for five million euros.
The sale of some businesses to BASF, which was a condition that regulatory authorities have established for the approval of Monsanto's acquisition business, will reduce Bayer's revenues by 1,000 ME.
Source: "Diário de Notícias" newspaper and author on September 5, 2018.