GERMAN chemicals giant Bayer on Tuesday (Nov 12) cut its 2024 corporate profit forecast after poor performance in its agrochemicals division hit quarterly profits.
The group reported a net loss of about 4.2 billion euros ($6 billion) in the third quarter, with revenues in the agricultural unit falling 3.6 percent.
A heavy drop in sales of key glyphosate-based weedkillers – which have been at the center of long-running legal battles over claims they cause cancer – weighed particularly heavily.
Profits at the agricultural unit were also hit by heavy write-downs on assets.
“The development of the agricultural market is weaker than expected, especially in Latin America,” the group said.
The Leverkusen-based group, which also makes pharmaceuticals and consumer health products, confirmed its 2024 sales targets.
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But it cut its outlook for earnings before interest, taxes, depreciation and amortization (Ebitda) – or operating profits, a key measure of corporate profitability – to between 10.4 billion and 10.7 billion euros, compared with a previous forecast of between 10.7 billion and 11.3 billion euros. euros.
It also lowered the outlook for profit margins in the agrochemical division.
Bayer reported slightly higher sales in its pharmaceutical division, but a decline in operating profit due to currency effects. The consumer health department reported higher sales and profits.
The group has been dogged in recent years by huge lawsuits related to the Roundup weedkiller, a problem it inherited when it acquired US company Monsanto in 2018.
Bayer has faced a wave of lawsuits in the US over claims that Roundup, which contains the active ingredient glyphosate, causes cancer. The German company denies the claim and has spent billions of euros on legal fees.
Group chief executive officer Bill Anderson, who was hired last year to steer the troubled group in a new direction, aims to make savings of two billion euros a year from 2026.
He has previously ruled out an impending breakup of the group, despite pressure from activist investors to do so. AFP
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