Bayer cites disappointing results from agricultural activities in Brazil as the cause for the negative adjustment of expectations for 2017. The German pharmaceutical and chemical company stated this on July 27 when publishing the results for the second quarter.
Last quarter, Bayer recorded an almost unchanged operating result (€3,0 billion) on higher turnover. The bottom line was a net profit of €1,2 billion, a decrease of 11,3% compared to the same period a year earlier, when the chemical company reported a net profit of €1,4 billion.
Lower mold and insect pressure
Turnover increased from €11,8 billion in the second quarter of last year to €12,2 billion last quarter. In the Crop Science division, Bayer saw sales drop significantly and in Brazil it was left with stockpiles. Due to the lower mold and insect pressure, there was less demand for products. Because Brazil is the second largest agricultural producer in the world, this has had a major financial impact.
Earnings fell by 15,8% to €2,163 million, compared to €2016 million in the second quarter of 2,518. In the other markets, the agricultural sector did good business. In North America, sales increased by 5.0% and in Europe, the Middle East and Africa they were at similar levels to the previous year. In Asia/Pacific, sales fell 2%.
Fungicide sales plummeted
Sales were lower in all crop protection categories. In particular with fungicides where 40.2% fewer products were sold. The reductions for insecticides and herbicides are 16.9% and 6,0% respectively. In contrast, seed sales increased by 4,6% and the Environmental Science branch performed positively with a sales increase of 20.6%.
As a result of current business and foreign exchange, Bayer is lowering its expectations for the full fiscal year. The chemical giant predicts an increase in turnover to more than €2017 billion for 49. The company previously expected a turnover of €51 billion. The operating result, excluding one-off items, is expected to increase by 2017 to 5% in 10, compared to an increase of 10 to 15% previously expected.
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