German conglomerate Bayer AG (BYR.L,BAYRY.PK,BAYZF.PK) posted a surge in second-quarter profit, helped by lower losses and expenses. The company also maintained its outlook for 2013.
Management Board Chairman Dr. Marijn Dekkers said, "We are currently maintaining our forecast for 2013, even if this appears increasingly ambitious...It remains to be seen to what extent the unexpectedly weak development at MaterialScience will be offset by our improved performance in the Life Sciences."
Bayer aims to increase EBITDA before special items by a mid-single-digit percentage and improve core earnings per share by a high-single-digit percentage.
The firm expects to achieve group sales of 40 billion euros to 41 billion euros compared with the previous forecast of 41 billion euros. The forecast is for a 4 percent to 5 percent growth in sales on a currency and portfolio adjusted basis.
Considering the weak business development in the first half, MaterialScience believes full-year sales will not quite reach the prior-year figure. Previously it had expected slight increase to about 12 billion euros. The business generated 11.5 billion euros in 2012.
Net income climbed to 841 million euros ($1.12 billion) from last year's 481 million euros.
Special items totaled 256 million euros, compared to 762 million euros last year, and largely included impairment losses on intangible assets and expenses related to restructuring and litigation, mainly in connection with Cipro.
Earnings Before Interest and Tax or EBIT surged 73.9 percent to 1.287 billion euros due to lower items.
Sales advanced 1.9 percent to 10.36 billion euros from 10.17 billion euros in the previous year. After currency and portfolio adjustments, revenue growth was 4.6 percent.
In the HealthCare subgroup, sales grew 3.8 percent to 4.800 billion, supported by the new pharmaceutical products.
Within the business, the Pharmaceuticals segment sales grew 5.5 percent with the help of new products - the anticoagulant Xarelto, the eye medicine Eylea and the cancer drug Stivarga. Blood-clotting drug Kogenate and cancer drug Nexavar also saw significant sales growth.
Sales in the Consumer Health segment increased 1.4 percent to 1.969 billion euros with business expansion in all divisions.
In CropScience, sales increased 5.1 percent to 2.392 billion with strong growth in Latin America/Africa/Middle East and positive development in Asia/Pacific and Europe. Sales in North America were hurt by the late start to the season and declining acreages.
In MaterialScience, sales were 2.7 percent lower at 2.875 billion euros, amid lower selling prices in Asia/Pacific and Europe as well las higher raw material costs.
Bayer is up 0.5 percent in early morning trading at 84.79 euros.
by RTT Staff Writer
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