Coronavirus Pushes Bayer's Sales and Earnings Higher--Update
27 Aprile 2020 - 11:51PM
Dow Jones News
By Ruth Bender
BERLIN -- Bayer AG's Monday first-quarter profit rose as
customers of the German company's farming and drugs businesses
stocked up amid the novel coronavirus pandemic.
But Bayer said the pandemic also slowed progress the company had
made on resolving its high-stakes legal battle with U.S. plaintiffs
alleging the company's Roundup herbicides cause cancer.
One of a select group of companies whose business thrived amid
nationwide lockdowns in the past quarter, Sales rose 4.8% to
EUR12.85 billion ($13.91 billion), beating analyst expectations.
Net profit rose to EUR1.49 billion from EUR1.24 billion a year
earlier. Bayer said it couldn't predict how the pandemic would
affect its business, positively or negatively, over the rest of the
year.
Sales at the consumer health unit, which produces aspirin and
had been struggling to boost sales in recent years, rose 13.5% in
the quarter when stripping out currency changes and the loss in
sales from brands the company sold last year. The unit saw strong
increases in demand across regions and products. The anticoagulant
medication Xarelto also continued to drive Bayer's business, with
people stocking up on the product.
In the crop science business, which includes recently acquired
Monsanto, sales benefited from the advanced purchases of its seeds,
fungicides and pesticides in Europe and the Middle East as well as
a substantial increase in acreages in the U.S.
"With our life science product portfolio in the areas of health
and nutrition, we have shown our ability to successfully continue
our business operations in a challenging environment and deliver a
positive contribution for our stakeholders even during a time of
crisis," Chief Executive Werner Baumann said.
The latest rise in earnings comes as investors continue to wait
for Bayer to settle the legal battle over the Roundup weedkiller
that has been weighing on its share price.
Bayer has been negotiating a settlement over the claims that
Roundup, which was inherited from Monsanto, cause cancer. Bayer
said it had made progress on mediation ahead of the pandemic, but
the rapid spreading of the virus then "significantly slowed" the
mediation process.
The total number of plaintiffs rose to 52,500 as of April 14 but
the pace of growth has slowed compared with recent quarters.
Bayer said it would continue to engage in mediation but that
now, more than ever, it would be careful about how much it would
agree for a settlement.
"The company will continue to consider a solution only if it is
financially reasonable and puts in place a mechanism to resolve
potential future claims efficiently," Mr. Baumann said. "Against
the background of a looming recession and looking at, in part,
considerable liquidity challenges, this applies now more than
ever."
Write to Ruth Bender at Ruth.Bender@wsj.com
(END) Dow Jones Newswires
April 27, 2020 17:36 ET (21:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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