Coronavirus Pushes Bayer's Sales and Earnings Higher--Update

By Ruth Bender

BERLIN -- Bayer AG's Monday first-quarter profit rose as customers of the German company's farming and drugs businesses stocked up amid the novel coronavirus pandemic.

But Bayer said the pandemic also slowed progress the company had made on resolving its high-stakes legal battle with U.S. plaintiffs alleging the company's Roundup herbicides cause cancer.

One of a select group of companies whose business thrived amid nationwide lockdowns in the past quarter, Sales rose 4.8% to EUR12.85 billion ($13.91 billion), beating analyst expectations. Net profit rose to EUR1.49 billion from EUR1.24 billion a year earlier. Bayer said it couldn't predict how the pandemic would affect its business, positively or negatively, over the rest of the year.

Sales at the consumer health unit, which produces aspirin and had been struggling to boost sales in recent years, rose 13.5% in the quarter when stripping out currency changes and the loss in sales from brands the company sold last year. The unit saw strong increases in demand across regions and products. The anticoagulant medication Xarelto also continued to drive Bayer's business, with people stocking up on the product.

In the crop science business, which includes recently acquired Monsanto, sales benefited from the advanced purchases of its seeds, fungicides and pesticides in Europe and the Middle East as well as a substantial increase in acreages in the U.S.

"With our life science product portfolio in the areas of health and nutrition, we have shown our ability to successfully continue our business operations in a challenging environment and deliver a positive contribution for our stakeholders even during a time of crisis," Chief Executive Werner Baumann said.

The latest rise in earnings comes as investors continue to wait for Bayer to settle the legal battle over the Roundup weedkiller that has been weighing on its share price.

Bayer has been negotiating a settlement over the claims that Roundup, which was inherited from Monsanto, cause cancer. Bayer said it had made progress on mediation ahead of the pandemic, but the rapid spreading of the virus then "significantly slowed" the mediation process.

The total number of plaintiffs rose to 52,500 as of April 14 but the pace of growth has slowed compared with recent quarters.

Bayer said it would continue to engage in mediation but that now, more than ever, it would be careful about how much it would agree for a settlement.

"The company will continue to consider a solution only if it is financially reasonable and puts in place a mechanism to resolve potential future claims efficiently," Mr. Baumann said. "Against the background of a looming recession and looking at, in part, considerable liquidity challenges, this applies now more than ever."

Write to Ruth Bender at Ruth.Bender@wsj.com

(END) Dow Jones Newswires

April 27, 2020 17:36 ET (21:36 GMT)

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