Bayer AG (BAYRY.PK,BAYZF.PK) Tuesday reported about 34 percent decline in second-quarter profit, impacted by special items, including certain litigation provisions. Core earnings per share, excluding items, increased from last year, as the German conglomerate's topline increased, helped by contributions from all subgroups, with CropScience making a substantial contribution.
Following the good business performance in the first half of 2012, especially at CropScience and HealthCare, the company is confident for the second half of the year, and raised its guidance for the full year 2012.
Bayer CropScience sales grew 17.1 percent to 2.28 billion euros. In Crop Protection, nearly all business units saw double-digit percentage growth rates, the company said. EBITDA before special items increased 16.6 percent from a year ago.
Bayer HealthCare subgroup sales increased 10 percent to 4.63 billion euros. The company noted that Pharmaceuticals and Consumer Health segments both contributed to this growth. "The gratifying business in the emerging markets contributed particularly to this development," said Chairman Marijn Dekkers.
In Pharmaceuticals segment, sales rose 4.3 percent. Among the segment's leading products, sales of the anticoagulant Xarelto increased markedly following market launches in further countries and expansion of indications, the company said. Revenues from the hormone-releasing intrauterine device Mirena grew 26.7 percent and multiple sclerosis treatment Betaferon/Betaseron improved 10.2 percent.
Sales in the Consumer Health segment rose 3.8 percent.
In MaterialScience, business with high-tech materials improved 6.5 percent. MaterialScience generated the highest quarterly sales in its history, the company noted.
In the second quarter, Group net income declined to 494 million euros or 0.60 euros per share from 747 million euros or 0.90 euros per share in the year-ago quarter.
However, core earnings per share, which excluded one-time items, increased to 1.47 euros from 1.29 euros in the previous year.
The company said its recent-quarter results were impacted by special items of 0.8 billion euros that included risk provisions of 496 million euros for all litigations in connection with oral contraceptive Yasmin.
EBITDA, a key earnings measure, declined 18.1 percent to 1.56 billion euros, while EBITDA before special items rose 6.7 percent to 2.17 billion euros.
Sales for the quarter grew 10 percent to 10.18 billion euros. The currency and portfolio-adjusted increase in sales was 5 percent.
For the full year 2012, the company now sees currency- and portfolio adjusted sales increase of between 4 and 5 percent, compared with the previous estimate of 3 percent. This would result in Group sales in the range of about 39 billion euros - 40 billion euros for 2012, up from the prior expectation of 37 billion euros.
Bayer currently intends to increase EBITDA before special items by a high-single-digit percentage, also anticipating to raise core earnings per share by about 10 percent. Earlier, the company projected slight improvement in EBITDA before special items and core earnings per share.
On Frankfurt's Xetra, Bayer shares are currently trading at 61.88 euros, up 1.2 percent.
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by RTT Staff Writer
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