Bayer's sales up but profits down

Bayer's sales from continuing operations (which exclude the EC Erdölchemie and Fibers business groups) rose by 8% in the first half of 2001 compared with the same period of the previous year to reach Euro15.6 billion (US$13.8 billion). However, the operating result before exceptional items shrank 23% to Euro1.5 billion (US$1.3 billion). 'This decline in earnings is very disappointing', said Dr Manfred Schneider, chairman. However, Schneider was pleased with the development of the chemicals segment, where sales grew 19% to Euro2.5 billion (US$2.2 billion) and raised their operating result by 18% to Euro300 million (US$266 million). But Schneider added that 'the anticipated economic recovery has unfortunately not yet materialised'. Growth in Europe, particularly in Germany, continued to weaken in the second quarter. In North America, there was no discernible turnaround and this is having an increasing effect on the Asian markets. 'Against this background and in view of the additional financial burden and loss of earnings in the health care segment resulting from the withdrawal of the cholesterol-lowering drug Lipobay/Baycol, we must assume that earnings for the year as a whole will be significantly below our previous expectations', said Schneider. Bayer have also launched a number of initiatives to improve profitability which are aimed at saving Euro1.5 billion (US$1.3 billion) by 2005.