German conglomerate Bayer AG (BYR.L, BAYRY.PK, BAYZF.PK) Thursday reported higher profit in its first quarter reflecting lower charges as well as higher sales mainly from new pharmaceutical products and emerging markets. Looking ahead, the company backed its fiscal 2013 growth forecast for earnings and sales.
Management Board Chairman Marijn Dekkers noted that the quarterly results were marked by the positive development of its Life Sciences businesses. "HealthCare and CropScience got off to a good start in our anniversary year. Our new pharmaceutical products especially grew at a dynamic pace. We continue to see attractive perspectives for 2013 overall. We confirm our outlook for the Bayer Group."
In its recently concluded first quarter, Bayer's net income increased 11.5 percent to 1.16 billion euros from last year's 1.04 billion euros. Earnings per share improved 11.1 percent to 1.40 euros from 1.26 euros a year ago.
Special charges resulted entirely from restructuring measures amounted to 45 million euros, lower than last year's special charges of 169 million euros. Quarterly core earnings per share, which excluded special items, advanced 1.8 percent to 1.70 euros.
Earnings before interest and taxes, or EBIT went up 8.6 percent to 1.77 billion euros, while EBIT before special items edged up 0.9 percent. Earnings before interest, tax, depreciation and amortization or EBITDA, before special items, increased 0.4 percent.
Sales for the quarter increased 2.1 percent to 10.27 billion euros from prior year's 10.05 billion euros. Adjusted for currency and portfolio effects, business expanded 3.7 percent.
The company noted that the 6.8 percent increase in the emerging markets was nearly three times larger than in the industrialized countries, with strong expansion in business in the BRIC countries - Brazil, Russia, India and China.
HealthCare subgroup's sales were benefited primarily by new pharmaceutical products, such as oral anticoagulant Xarelto, eye disease drug Eylea and cancer drug Stivarga, which generated combined sales of 244 million euros, higher than last year's 42 million euros.
The business with non-prescription medicines also experienced a strong quarter. Sales in the Emerging Markets, particularly those of Asia and Eastern Europe, maintained their momentum, posting double-digit growth rates, the company added.
Sales of the agriculture business increased with strong growth mainly in North America, despite a late start to the season in the northern hemisphere.
MaterialScience faced cost pressure, while an overall increase in selling prices for high-tech materials compensated for a drop in volumes in Europe and North America.
Looking ahead, for fiscal 2013, Bayer continues to expect growth in EBITDA before special items by a mid-single-digit percentage and core earnings per share by a high-single-digit percentage. Sales are still projected to increase 4 to 5 percent to about 41 billion euros, based on unchanged currency assumptions.
On Frankfurt's Xetra, Bayer shares are currently trading at 79.74 euros, down 0.88 euros or 1.09 percent.
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