German chemicals giant Bayer cuts key target amid weedkiller woes

GERMAN chemicals giant Bayer cut its forecast for 2024 operating earnings on Tuesday (Nov 12), after a poor performance in its agrochemicals division hit quarterly profits.

The group reported a net loss of about 4.2 billion euros (S$6 billion) in the third quarter, with revenues in its agricultural unit down 3.6 per cent.

A heavy drop in sales of its key glyphosate-based weedkillers – at the centre of long-running legal fights over claims they cause cancer – weighed particularly heavily.

Earnings at the agricultural unit were also hit by hefty write-down on assets.

“The development of the agricultural market has been weaker than anticipated, especially in Latin America,” the group said.

The Leverkusen-based group, which also makes pharmaceuticals and consumer health products, confirmed its sales targets for 2024.

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But it lowered its outlook for earnings before interest, taxes, depreciation and amortisation (Ebitda) – or operating earnings, a key measure of corporate profitability – to between 10.4 billion and 10.7 billion euros, from a previous forecast of between 10.7 billion and 11.3 billion euros.

It also cut the outlook for profit margins in the agrochemicals division.

Bayer reported slightly higher sales in its pharmaceuticals division, but a drop in operating earnings due to currency effects. Its consumer health unit reported higher sales and earnings.

The group has been dogged in recent years by massive litigation issues linked to the Roundup weedkiller, a problem it inherited in the 2018 takeover of US company Monsanto.

Bayer has faced a wave of lawsuits in the US over claims that Roundup, which contains the active ingredient glyphosate, causes cancer. The German company denies the claim and has spent billions of euros on legal costs.

Group chief executive officer Bill Anderson, hired last year to help steer the troubled group in a new direction, is aiming to make savings of two billion euros a year from 2026.

He has previously ruled out any imminent break-up of the group despite facing pressure from activist investors to do so. AFP