Bayer: second-quarter down due to Monsanto expenses

(CercleFinance.com) - German chemicals and drugs group Bayer posted an 8% drop in second-quarter operating profit, when it first integrated the accounts of the US group Monsanto.


Bayer - which completed the acquisition of Monsanto last June for 63 billion dollars - saw EBIT fall by 7.7% to 1.351 billion euros in the last quarter, mainly due to expenses relating to the deal.

Net income fell by 34.7% to 799 million euros, primarily due to the absence of earnings contributions from its former polymer materials unit Covestro following deconsolidation.

In contrast, sales in second-quarter rose by 8.5% to 9.48 billion euros. On a reported basis, they rose by 8.8%.

In the agricultural business, the company posted sales of 3.01 billion euros, a figure that includes 543 million euros from the acquisition of Monsanto.

As the acquisition of Monsanto closed later than anticipated, Bayer's 2018 earnings will be lower than it projected in its February forecast, due to the seasonality of Monsanto's business.

Bayer now expects core EPS of between 5.70 euros and 5.90 euros and not "at the prior-year level" as it did before.

The Frankfurt-listed shares are currently down 2.3% after this report.

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