Bayer 4Q Net Profit Slumped on U.S. Tax Reform -- Update
February 28 2018 - 3:07AM
Dow Jones News
Adds more information on unit performance, guidance,
Monsanto
By Nathan Allen
Bayer AG (BAYN.XE) said Wednesday that its fourth-quarter net
profit slumped, due largely to a hit from the U.S. tax reforms.
Net profit for the quarter fell 67% to 148 million euros ($181.9
million) compared with EUR453 million a year earlier, while sales
fell 2.6% on year to EUR8.60 billion, the company said.
A consensus forecast provided by FactSet had predicted net
profit of EUR745 million and sales of EUR8.63 billion.
Bayer attributed the lower earnings to a EUR455 million tax hit
from the U.S. fiscal reforms and ongoing difficulties with its
Brazilian crop-science business.
Bayer said that its earnings before interest, taxes,
depreciation and amortization before special items fell slightly to
EUR1.78 billion, from EUR1.81 billion in the year-earlier
period.
All of Bayer's four business units reported lower sales in the
fourth quarter and all except pharmaceuticals posted lower
operating profit, the company said.
The company said its net profit for the full year rose nearly
62% to EUR7.34 billion.
For 2018, the company expects sales and earnings at the
prior-year level, despite likely currency losses. The forecast
includes expected supply interruptions due to plant maintenance,
which will cause a EUR300 million hit to adjusted Ebitda, Bayer
said.
Adjusted for currency and scope effects, Bayer said it expects
sales to increase by a "low- to mid-single-digit percentage."
Bayer said it reduced its net financial debt by nearly 70% on
year to EUR3.60 billion, thanks largely to the sale of its share in
Covestro AG (1COV.XE).
"We are therefore in a good position for the pending financing
activities connected with the proposed acquisition of Monsanto,"
said Chief Financial Officer Johannes Dietsch.
The company expects the acquisition of Monsanto to go through in
the second quarter.
Write to Nathan Allen at nathan.allen@dowjones.com
(END) Dow Jones Newswires
February 28, 2018 02:52 ET (07:52 GMT)
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