Rising food prices have an indirect positive effect on the sales of the chemical company Bayer. Corona restrictions that have been lifted also play into his hands.
Strong global agricultural demand for seeds and crop protection products gives the Bayer Group a boost. Farmers have recently resorted to weed and fungus control products in particular, because high prices for crops provide plenty of incentive to spend money to protect the harvest.
In the pharmaceutical business, however, things were not quite as dynamic at the start of the year as the group announced on Tuesday when it presented its quarterly figures. The agricultural and pharmaceutical group is quite optimistic about the near future.
Strong increase in group sales
“Despite the high degree of uncertainty, we are confident about the rest of the year, including with regard to the stability of the supply chains and energy supply,” said company boss Werner Baumann.
According to the information, group sales increased by almost a fifth in the first quarter compared to the previous year to 14.6 billion euros. Excluding currency effects and the acquisition and sale of parts of the company, the result was an increase of a good 14 percent. The operating result (Ebitda) before special items increased by more than a quarter to 5.25 billion euros from January to March year-on-year. The bottom line was 3.3 billion euros at the start of the year, after 2.1 billion a year ago.
The agricultural division of the group did particularly well. It increased its sales in the first quarter from its own resources by more than a fifth to 8.4 billion euros, including currency effects it was a little more. The herbicide business grew by almost 60 percent. The price for the controversial weed killer glyphosate, which had risen sharply in the second half of 2021, also provided tailwind here. And corn seed also sold well, with Bayer being able to push through price increases in all regions. The division’s operating result before special items soared by half to almost 3.7 billion euros.
In the pharmaceuticals division, on the other hand, the adjusted operating result fell by a good seven percent to just under 1.4 billion euros – with a small increase in sales. However, this is also due to the fact that the company is currently spending a lot of money on the marketing of new drugs, especially for the kidney drug for diabetics, Kerendia, and for Nubeqa against prostate cancer.
More over-the-counter drugs sold
The smallest division, Consumer Health, which deals with over-the-counter medicines, on the other hand, benefited from the lifting of numerous corona restrictions in many countries. People went out more, even without a mask, and caught more colds as a result. Consumer Health’s operating profit rose by a third to 388 million euros.
For 2022 as a whole, Bayer continues to expect Group sales to grow by around 5 percent to around EUR 46 billion on a constant currency and portfolio-adjusted basis. Adjusted operating profit is expected to improve to around 12 billion euros. In 2021 it was 11.2 billion.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
