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Bayer misses estimates on weaker ag earnings, currency headwinds

February 26/2021

MOSCOW (MRC) -- Bayer reports a 78.2% decrease in fourth-quarter net profit compared with the corresponding period of the previous year, to EUR308 million (USD376 million) on sales down 7%, to just under EUR10 billion, said Chemweek.

Fourth-quarter EBITDA before exceptional items decreased 3.4% year on year (YOY) to EUR2.4 billion, missing analysts consensus estimate by 2.4% on lower earnings and sales at the companys agricultural and consumer health businesses, as well as currency effects.

Bayer posted a full-year net loss of EUR10.5 billion, swinging from net profit of EUR4.1 billion in 2019. The figure includes net special charges of EUR23.3 billion comprised mainly of provisions for the agreements reached in the glyphosate, dicamba, PCB, and Essure litigations. Other special items mainly included impairment charges at the ag business.

Full-year sales were EUR41.4 billion, down 4.9%. At EUR11.5 billion, EBITDA before special items was at the prior-year level, giving an EBITDA margin of 27.7%. Currency effects diminished sales by EUR1.9 billion and EBITDA before special items by EUR741 million, Bayer says.

Bayer says it achieved a robust performance in 2020. Our operational strength in these turbulent times shows just how resilient our businesses are, even during the pandemic, said Bayer chairman Werner Baumann at a press briefing on Thursday. In the ag business, Crop Science, Bayer posted a 30% YOY drop in fourth-quarter EBITDA before exceptional items, to EUR594 million, with sales decreasing 10.2%, to EUR4.2 billion on lower volumes.

Bayer says its 2020 group free cash flow was diminished by payments of just under EUR4.0 billion to resolve litigations and amounted to EUR1.3 billion, down 68.1%. Regarding glyphosate litigation in the US, the company announced last month that it had reached an agreement with plaintiffs' counsel on a class plan intended to manage and resolve future Roundup cases, and plaintiffs' counsel filed a motion for preliminary approval of the class agreement. Bayer says it continues to negotiate with plaintiffs counsel to reach agreements in the rest of the current cases.

EBITDA at Bayers consumer health business declined 2.5% in 2020, to EUR1.10 billion on sales down 7.5%, to EUR5.05 billion. The greater focus on health and prevention in connection with the COVID-19 pandemic generated substantial growth in demand, especially in the nutritionals category, which saw sales advance by 22.6%, Bayer says.

As MRC informed earlier, Covestro (formerly Bayer MaterialScience) received its first delivery of certified renewable phenol from Borealis, to be used as a drop-in feedstock for the production of polycarbonate plastic. The phenol is manufactured by Borealis using renewable hydrocarbons feedstock supplied by Neste, sourced from waste and residual oils and fats.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17%  year on year.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PK, PC granules, PC compounds, Bayer, Covestro.
Category:General News
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