'Satisfactory' first half performance from Bayer
The Bayer Group improved its year-on-year operating result by 80.2% in the second quarter of 2003 to €454m, thanks in part to a particularly strong performance by the pharmaceuticals/biological products segment. EBIT for the first half of 2003 rose by 40% to €1.5bn.
The Bayer Group improved its year-on-year operating result by 80.2% in the second quarter of 2003 to €454m, thanks in part to a particularly strong performance by the pharmaceuticals/biological products segment. EBIT for the first half of 2003 rose by 40% to €1.5bn.
Although group sales declined by 3.3% to €7.3bn in the second quarter due to the strength of the euro, business expanded in most regions, with sales in-creasing by 7.3% in local currencies. First-half sales totalled €14.6m, down 0.8% in euros but up 9.8% in local currencies. Despite a fall in sales of the healthcare business by 6.2% in the second quarter to €2.2bn, EBIT climbed by 52.8% to €379m. EBIT for the pharmaceuticals/biological products segment increased in the second quarter by 43.1% to €146m, mainly due to higher sales of Ciprobay/Cipro and Kogenate and to improved cost structures.
The number of Baycol cases resolved by settlement has increased substantially. As of 1 August, 2003, Bayer had settled 1,211 cases, without acknowledging any legal liability, for payments totalling €378m (US$432m). Approximately 10,100 cases are still pending.
The company is cautious about the prospects for the remainder of 2003 and expects to have only limited scope to increase selling prices. At the same time, the continuing weakness of the US dollar and high raw material costs are likely to hold back earnings, particularly in the industrial business. In the healthcare business, earnings are likely to be restrained by launch costs for the erectile dysfunction drug Levitra and competitive pressure from generics in the US. Here too, however, the company's efficiency programmes should ease the situation.
'For the time being we cannot expect any stimulus for our business through an improvement in the economy,' said Werner Wenning, management board chairman. 'So we will drive forward our thorough internal restructuring with even greater vigour in order to improve our earning power sustainably.
'After the strong first quarter, we are quite satisfied with our performance in the second quarter and with the first half overall,' he commented 'Provided there is no further deterioration in the economy as a whole, we continue to expect the operating result from continuing operations to increase by a double-digit percentage over 2002.'