29 July 2010 08:15 [Source: ICIS news]
LONDON (ICIS)--Bayer's second-quarter net income fell 1.3% year on year to €525m (€682m), despite improved sales, due to special charges of €255m related partly to litigations at its HealthCare and CropScience segments, the German specialty chemicals maker said on Thursday.
Sales rose 14.6% to €9.18bn, mainly due to the recovery of its MaterialScience segment, as well as positive currency effects.
“MaterialScience has left the crisis behind and saw business expand more strongly than expected. Volumes have returned to the pre-crisis level,” said management board chairman Werner Wenning.
MaterialScience's sales rose 46.9% year on year to €2.69bn due to significantly higher demand from all customer industries as well as on higher selling prices in Asia-Pacific and Europe, Bayer said in a statement.
“This very gratifying improvement was due especially to the considerable increase in demand in our primary customer industries,” Wenning said. Volumes rose significantly in all product groups and regions.
Sales from Bayer’s HealthCare segment rose by 6.4% in the second quarter to €4.31bn compared with the same period last year, “with Consumer Health posting particularly pleasing growth”, said Wenning.
Meanwhile, sales from its CropScience segment during the second quarter rose only slightly by 1.7% to €1.88bn as volumes and selling prices declined in a market environment made difficult by the competitive situation and unfavourable weather conditions.
After adjusting for currency and portfolio effects, sales from its CropScience segment fell by 5.5%.
“The declines in the conventional crop protection business were partially offset by the continued positive business performance in Environmental Science and BioScience,” Wenning said.
Wenning also announced that Bayer would increase its future investments more substantially than planned.
“We now expect research and development expenses for the full year to come in at a record level of some €3.1bn,” he said.
Previously the group had planned to raise research and development spending in 2010 to approximately €2.9bn.
Looking ahead for the full year; Bayer expected a further recovery in the global economy, albeit at a slow pace. The group added that a strong recovery at its MaterialScience segment was compensating for the below-forecast business performance at its HealthCare and CropScience businesses.
“We remain optimistic for 2010,” Wenning said.
($1 = €0.77)
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