Bayer said that the lower prognosis for its Crop Science subsidiary and anticipated flat sales of glyphosate-based herbicides were the key factors behind last month's reduction in its full-year profits estimate.
In an unscheduled announcement last month, the German manufacturer of pharmaceuticals and pesticides stated that it expected 2023 group earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted for one-offs, to be between 11.3 billion euros ($12.5 billion) and 11.8 billion euros on a currency-adjusted basis, down from the 13.5 billion euros reported for 2022.
It stated in a statement that the Crop Science agricultural business' adjusted EBITDA margin for 2023 sales would be roughly 21%, down from the 25% forecast made in May. Divisional sales, after accounting for exchange rates, would be down around 5% rather than up about 1.5% as previously reported.
Since taking the helm in June, the CEO of a former Roche (ROG.S) executive has had some difficulties. Cost inflation, dry weather reducing farmer demand, and a decline in pricing of glyphosate-based weedkillers from last year's highs when revenues were inflated by rivals' production outages have all impacted Bayer's primary agricultural sector.
The profit margin for prescription medicine sales would be around 28% this year, down from a previous aim of more than 29%, and not up by about 1% as had been anticipated. Despite being the smallest of Bayer's three businesses, sales of non-prescription consumer health products increased by 5% this year.
Additionally, due to impairment charges of 2.3 billion euros, Bayer reported a net loss of 1.89 billion euros for the second quarter. Earlier, it had stated that early data indicated anticipated goodwill impairments of around 2.5 billion euros, which resulted in a second-quarter net loss of 2 billion euros.
