Bayer raises outlook on strong results

German chemical and pharmaceutical group Bayer posted an 8.4-percent increase in first-quarter net profit on Thursday while signalling improvement in its agricultural products division. Bayer, the maker of pain-killer Aspirin, said that net profit rose to 684 million euros ($1.0 billion), and also raised its full-year forecast. First-quarter sales gained 13.2 percent to 9.415 billion euros and operating profit rose by four percent 1.148 billion. All three of Bayer's main divisions contributed to the results, and chief executive Marijn Dekkers expressed particular satisfaction with results from the group's CropScience unit. "We are raising our group sales and earnings forecast for this year, mainly because of the improvement we expect at CropScience," a statement quoted Dekkers as saying. Sales at that division gained 15.6 percent from the weak first quarter of 2010, to 2.257 billion euros. Looking at its other two pillars of activity, Dekkers said sales were 7.7 percent stronger at Bayer's HealthCare division, "largely due to the positive development in the consumer health segment." Material Science, the unit which produces foams, plastics, and raw materials for coatings and adhesives, turned in a 21.2 percent increase in sales to 2.686 billion euros. Earnings were curbed by 442 million euros in charges however, including 194 million taken in connection with the settlement of cases brought in the United States against Bayer's genetically modified rice programme. Core earnings before special items gained 34.6 percent to 1.59 billion euros, while the group's debt was cut by 800 million euros to 7.1 billion. For the full year, Bayer now expects sales to grow by five to seven percent, a slight improvement on its earlier forecast for growth of four to six percent. That should put them between 36 billion and 37 billion euros, the statement said. Earnings before interest, taxes, depreciation and amortisation (Ebitda)is forecast to exceed 7.5 billion euros, compared with an initial estimate of "toward 7.5 billion euros." Bayer's shares gained a solid 1.43 percent to 58.36 in opening trading on the Frankfurt stock exchange, while the DAX index on which they are listed was 0.64 percent higher in general.