Bayer 4Q Net Profit Up 58 Percent to euro106 million
Tue, 03/03/2009 - 5:24am
By GEORGE FREY AP Business Writer FRANKFURT (AP) — German drug and chemical maker Bayer AG reported Tuesday a 58 percent jump in fourth quarter net profit despite difficult market conditions, and said it expected further growth at its health care and crop science divisions in 2009. The Leverkusen-based company said net profit increased to euro106 million ($135 million) in the October through December period from euro67 million in the same quarter a year earlier. Sales in the fourth quarter fell 2 percent to euro7.9 billion from euro8 billion. For the full year 2008, the company reported a 2 percent increase in sales to euro32.9 billion from euro32.4 billion a year ago. Net profit for the full year was substantially lower at euro1.7 billion in 2008, compared with euro4.7 billion in 2007. But 2007's profit benefited from about euro3.3 billion in gains from the divestment of Bayer's diagnostics business and more favorable tax rates. Werner Wenning, the company's chief executive, expressed confidence for 2009 despite substantial risks for the future development of the world economy: "We expect further growth in earnings at health care and crop science, along with a substantial reduction in net debt." By contrast, the company said a substantial drop in earnings is anticipated at the company's material science business, which makes products like glues, sealants and plastics. Shares of Bayer fell 1.8 percent at euro35.73 in Frankfurt morning trading. Bayer's health care business reported a sales increase of 4 percent for the full year to euro15.4 billion. Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the division rose 9.6 percent to euro4.2 billion. Bayer said the gains were largely due to synergies realized from the integration of Schering Pharma, which Bayer bought in 2006. Pharmaceutical sales rose 4 percent on the year to euro11 billion, with the Nexavar cancer drug posting the highest growth rate of over 75 percent. YAZ oral contraceptive sales rose 22 percent while multiple sclerosis treatments Betaferon and Betaseron gained 15 percent in sales. The consumer health care division, which sells treatments like diabetes medicines and antifungals, saw sales increase 4 percent to euro4.7 billion. The crop science division reported a 10 percent rise in sales to euro6.4 billion. EBITDA for the division rose 21 percent to euro1.6 billion, while sales rose 12 percent, mainly due to better weather conditions around the world compared with a year ago. Fungicide products were the best sellers, recording a 28 percent increase in sales. In the material science segment however, Bayer saw weaker growth as the global economic crisis hampered sales for nearly all products and regions. Sales in 2008 fell almost 7 percent to euro9.7 billion, while EBITDA fell 32 percent to just over euro1 billion. Bayer said the division's earnings were also weakened by higher prices for petrochemical raw materials and energy.