Bayer's operating profit down
LEVERKUSEN (Reuters / March 13, 2003) -- Germany's Bayer AG posted
a 46 percent fall in 2002 operating profit on continuing operations on
Thursday and said it faced even more lawsuits for its recalled cholesterol
drug Baycol.
The operating profit figure came in at 989 million euros ($1.09 billion),
roughly in line with expectations, and the company reiterated it saw
an improvement this year.
Bayer, which said it continued to seek a partner for its ailing drugs
business, reported 2002 sales from continuing operations of 29 billion
euros, down one percent from the year before.
It achieved a 10 percent rise in net income to 1.1 billion euros, largely
on the back of asset sales.
Analysts in a Reuters poll of 15 analysts predicted an operating profit
on continuing businesses, before exceptional items, of 967 million euros
on average.
Chief Executive Werner Wenning said in a statement the company now faced
8,400 lawsuits over Baycol, of which 4,600 were virtually identical complaints
filed by a single law firm.
Before Thursday, the number of suits had been at 7,800.
Bayer said it had so far settled with more than 500 individuals over
the recalled cholesterol drug for about 140 million euros, and is currently
in talks to settle several hundred further cases.
The company said that if the plaintiffs prevailed, Bayer could incur
charges in excess of insurance coverage, but it was currently not possible
to estimate potential liability.
Provisions had therefore not been made, it said.
"We continue to watch the situation very closely and, as the litigation
progresses, we will regularly reconsider the need to establish provision," Bayer
Chief Executive Werner Wenning said in a statement.
Bayer reiterated that it expected operating profits to improve in 2003.
Wenning said the development of sales and operating result in the first
two months had been encouraging.
Bayer also said it planned to cut net debt to seven billion euros by
the end of this year from 8.9 billion at the end of 2002, and aimed for
a margin on earnings before interest, tax, depreciation and amortisation
of 21 percent by 2006, up from 10 percent in 2002. |
