Bayer books steep slump in profits

The German chemicals and pharmaceuticals giant Bayer on Wednesday posted a 44 percent drop in first quarter net profit, owing mainly to poor results from its chemical division.

Bayer said its profit came to €425 million ($561 million), below an average analyst forecast of €492 million compiled by Dow Jones Newswires.

The group’s MaterialScience division suffered in particular from the weak global economy, with sales that dropped by 35 percent from the same period a year earlier to €1.63 billion, a statement said. “The slump in business at MaterialScience also left a distinct mark on the sales and earnings of the Bayer Group”, chairman Werner Wenning was quoted as saying.

Sectors which are less dependent on economic cycles put up stiff resistance however, with both the biotechnology CropScience and HealthCare divisions recording increases in sales and profit.

Bayer said operating profit for all of 2009 should increase in those two sectors, and anticipated diminishing losses from MaterialScience activities, which include the manufacturing of plastics and high-tech materials.

The downturn in sales for that unit “seems to be bottoming out. The first signs of a modest recovery in demand are appearing,” Wenning said. Overall, group core earnings before exceptional items should decrease by no more than five percent this year, the statement said.

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