29 July 2009 10:35 [Source: ICIS news]
(Updates with latest share price)
SINGAPORE (ICIS news)--German specialty chemicals maker Bayer reported on Wednesday a 7.3% year-on-year drop in its second-quarter net profits to €532m ($755m) as a poor performing MaterialScience division continued to drag down earnings of the group.
"MaterialScience has responded extensively to the slump in demand," the chairman of the management board of Bayer, Werner Wenning, said.
According to financial data released by the company, Bayer’s MaterialScience division was the only business segment that reported a loss before interest, tax and special items during the three-month period to 30 June, of €22m.
Earnings before interest, tax and special items from the company’s Healthcare business rose 19% year on year to €758m, while contribution from the Cropscience division was flat at €374m for the same period.
Group revenue for the quarter came in 6% lower year on year at €8.01bn, largely due to a 30% plunge in sales volumes at Bayer’s MaterialScience division.
“Demand in key customer industries was significantly lower than in the prior-year period due to the financial and economic crisis,” Bayer said, adding that certain capacities within the business segment would be permanently shut by the end of the year.
Bayer gave a full-year group sales guidance of between €31-32bn and reiterated its target of limiting any declines in group earnings before interest, tax, depreciation and amortisation (EBITDA) before special items to 5%.
Bayer shares had risen to €41.77 by 11:17 CET, up 4.3% from Tuesday's close.
($1 = €0.71)
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