Bayer (BAYGn.DE), a drug and pesticide company, said cost inflation and the reversal of last year’s glyphosate-based weedkiller price hike would likely weaken its 2023 profits.
After Hurricane Ida destroyed rival producers and constricted Chinese suppliers failed to fill the gap, Bayer herbicide sales rose 44% in 2022. However, since competition reappeared this year, prices have dropped.
“Overall, we expect target attainment to come in at the lower end of our guidance,” CEO Werner Baumann, who will be followed by former Roche (ROG.S) executive Bill Anderson next month, said Thursday.
Baumann noted, “potential risks mainly arising from the significantly reduced market price expectations for glyphosate-based products.”
Bayer, facing costly lawsuits over its glyphosate-based weedkillers, will replace its CEO early amid investor demands that the German industrial giant streamline its complex structure and divide it into distinct businesses.
The healthcare and agriculture group’s first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 14.9% to 4.47 billion euros ($4.92 billion), missing the consensus analyst estimate of 4.63 billion euros.
Xarelto, its best-selling medication, saw revenues dip 13.2% owing to huge Chinese buying bids.
Quarterly revenues fell 2% to 14.4 billion euros.
The business said adjusted EBITDA in 2023 will fall to 12.5 billion euros from 13.5 billion euros in 2022.
That was due to lower farm sales projections, but pharmaceutical and consumer health product sales objectives were maintained.
The healthcare and agriculture group reported first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 4.47 billion euros ($4.92 billion), below the average analyst estimate of 4.63 billion euros posted on the company’s website.
As huge Chinese buying bids lowered the price of its best-selling medication Xarelto, revenues fell 13.2%.
14.4 billion euros in quarterly group revenues, down 2%.
The business said 2023 adjusted EBITDA will be towards the lower end of 12.5 billion euros of its prior goal range, down from 2022’s 13.5 billion euros.
Its pharmaceutical and consumer health product sales growth projections were confirmed, but its agriculture sales expectations were lowered.
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