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German chemicals and pharmaceuticals giant Bayer has reported lower earnings for its second quarter. The drop came as the firm presented its first financial statement after the mammoth takeover of Monsanto.
Bayer announced Wednesday it had logged net profits of €799 million ($926 million) in the second quarter, marking a 34.7 percent drop from bottom-line profits in the same period a year earlier.
The fall in earnings came despite a revenue increase from €8.7 billion to €9.5 billion, the company's latest financial statement showed.
Lower net profit was booked after, but not because of Bayer's €58.8 billion buyout of Monsanto, the biggest ever foreign takeover by a German firm. The acquisition aimed to create an agrichemical giant offering specialized seeds, compatible pesticides and data services for farmers.
Talking about lower Q2 earnings, the company said its health division had suffered from a less favorable euo-dollar exchange rate, higher production costs and delivery bottlenecks. Also, it could no longer rely on any profits from its former subsidiary Covestro, with Bayer selling the remaing stake in the expert in polymer solutions in March of this year.
Glyphosate and dicamba in focus
Investors were disappointed by Bayer's results, with shares shedding some 2 percent right after trading started on the Frankfurt Stock Exchange.
Pressure from environmental and consumer protection groups had pushed the European Union into renewing its license for flagship Monsanto weed killer glyphosate (Roundup) for just five years instead of the usual 15 years, with some EU member countries set to ban the product altogether or restrict its use.
A California court last month awarded a school groundskeeper damages of almost $290 million after finding that glyphosate had caused his cancer.
Bayer said Wednesday it was now confronted with a total of 8,700 lawsuits in the United States, most of them initiated in the states of Missouri, Delaware and California. Some farmers are pursuing the group over crop damage they say was caused by the dicamba pesticide.
hg/ap (AFP, Reuters)