Bayer gets Monsanto profit boost but legal burden mounts
FRANKFURT (Reuters) – German drug and farming supplies company Bayer posted a 45 percent gain in quarterly core earnings thanks to the acquisition of seed maker Monsanto, while the legal burden it took on with the deal mounted.
FILE PHOTO: Logo of Bayer AG is pictured at the annual results news conference of the German drugmaker in Leverkusen, Germany February 27, 2019. REUTERS/Wolfgang Rattay
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose to 4.19 billion euros ($4.67 billion), it said on Thursday, edging past the 4.12 billion euro average analyst forecast in a Reuters poll.
Bayer said 13,400 plaintiffs were seeking damages, alleging that use of the company’s glyphosate-based weedkillers caused their cancer, up from 11,200 in January.
Bayer has seen about 30 billion euros ($34 billion) wiped off its market value since August, when a California jury in that lawsuit found that Monsanto should have warned of the alleged cancer risks.
It will face shareholders’ anger at its annual general meeting on Friday.
“We continue to believe that we have meritorious defense and we intend to defend ourselves vigorously in all of these
lawsuits,” the company said.
On Wednesday, Bayer launched an appeal with a California court to throw out the first glyphosate-related judgment for $78 million in damages.
When including Monsanto’s pro-forma 2018 results in the comparison, revenues at Bayer’s Crop Science division from pesticides and seeds were broadly flat at 6.35 billion euros, excluding currency effects.
That was above an analyst consensus of 6.13 billion, as the launch of new insecticide products helped offset a decline on soybean seed sales. The shares were indicated 3.3 percent higher in early Frankfurt floor trading at 0742 GMT.
The company is still aiming for an increase in 2019 EBITDA before special items to about 12.2 billion euros, excluding the effect of currency swings and the planned sale of assets such as the animal health unit.
Revenues from its bestseller Xarelto, to prevent strokes, and eye drug Eylea both gained more than 15 percent, to 937 million euros and 583 million euros, respectively, beating market expectations.
Reporting by Ludwig Burger; Editing by Riham Alkousaa and Jon Boyle