The Bayer AG logo is pictured on the facade of the German pharmaceutical and chemical maker’s historic headquarters in Leverkusen, Germany, April 27, 2020. REUTERS/Wolfgang Rattay
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FRANKFURT, Aug 4 (Reuters) – Agricultural and pharmaceutical company Bayer (BAYGn.DE) on Thursday cut guidance for 2022 earnings due to strong demand from farmers for seeds and plant chemicals and higher sales of consumer health products.
Bayer now targets earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for special items, of about 13 billion euros ($13.21 billion), based on June 30 exchange rates, where it had previously forecast about 12 billion euros. said in a statement.
Bayer, which has been hit by legal costs over claims that a herbicide bought from its Monsanto acquisition causes cancer, said adjusted EBITDA in the second quarter rose 30% to 3.35 billion euros, above an average analyst estimate. of 3.28 billion euros posted on the company’s website.
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Prices of agricultural commodities such as corn and soybeans have risen globally after Russia’s invasion of Ukraine disrupted farming and grain transport there, prompting farmers elsewhere to use more chemicals and seeds to boost production.
The crop science division, which generated most of Bayer’s earnings during the first half of the year, saw adjusted EBITDA rise more than 70% to 1.75 billion euros in the second quarter, beating a consensus market of 1.56 billion euros.
In contrast, a court settlement and write-downs resulted in a net loss of nearly 300 million euros for the quarter, where analysts had forecast a net profit of about 1.5 billion euros, hit by special charges of 2.1 billion euros.
That included $694 million set aside for a pending settlement with the state of Oregon over wastewater contaminated with PCBs, a Monsanto chemical manufactured as far back as 1977.
Other charges included restructuring measures and write-downs of certain assets due to a sharp rise in interest rates.
($1 = 0.9842 euros)
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Reporting by Ludwig Burger, editing by Rachel More, Maria Sheahan and Tomasz Janowski
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