Bayer says 1Q result is on track

Related tags Chemical industry Bayer

German chemical company Bayer has posted flat first-quarter 2004
sales, but said that the results were on track given the negative
effects of currency factors. Organic sales growth rose 8.6 per
cent, it claimed, and was driven mainly be the healthcare and
cropscience businesses.

Sales reached €7.4 billion, while group earnings before interest and tax (EBIT) and special items were also flat at €827 million, with a good contribution from MaterialScience and Lanxess, the chemicals business scheduled to be floated on the stock market next year.

Group net income dropped to €400 million from €586 million, a little ahead of analyst expectations of around €375 million, in line with its peers​ in the European chemicals industry. There were gains a year earlier from the sale of its insecticides business and real estate.

Lanxess, which combines Bayer's chemical intermediates and performance chemicals, plastics and rubber activities, reported a 2.1 per cent decline in sales to €1.48 billion, although EBIT rose more than four-fold to €77 million from €17 million. Intermediates put in a 2.9 per cent sales rise, but fine chemicals posted a 'significant' decline in turnover, according to Bayer.

Overall sales of the health care subgroup inched up 0.8 per cent to €2.1 billion in local currencies, while the pharmaceutical segment reported sales of €906 million for the quarter, a 2.8 per cent rise.

Although overall results for the period were relatively positive for the firm, Bayer pointed out that its health care business is still under an increased risk from litigation in the US following the withdrawal of its statin Lipobay/Baycol (cerivastatin) on toxicity grounds, as well as the cessation of marketing products containing phenylpropanolamine.

Bayer reiterated its previous guidance that 2004 EBIT before special items is expected to rise over 10 per cent, with the caution of possible risks from the economic situation and, in particular, the volatility of global raw material prices.

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