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Bayer profit jumps 31%
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August 10, 2000: 3:43 a.m. ET
First-half sales rise 22% thanks to polymers, pharmaceuticals
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LONDON (CNNfn) - Bayer AG, Europe's third biggest chemicals company, posted a 31 percent jump in operating profit for the first half of the year Thursday, fueled by demand for pharmaceuticals and its acquisition of U.S.-based Lyondell Chemical's plastics business earlier this year.
The company also said it expects to post double-digit growth in sales and profit for the full year.
Bayer (FBAY), which operates chemicals, health care, agriculture and polymers units, earned  2 billion euros ($1.8 billion) in the first six months of 2000, up from 1.5 billion euros in the year-earlier first half.
On a net basis, first-half profit fell to 1 billion, from 1.7 billion a year earlier, dragged down by one-time expenses The 1999 results include a 1 billion gain on Bayer's sale of a majority stake in Belgian photograph film unit Agfa-Gevaert NV.
First-half sales climbed 22 percent to 14.8 billion ($13.3 billion).
The polymers segment accounted for the biggest portion of sales, rising 27 percent to 5.5 billion. Four percentage points of the sales growth resulted from the acquisition of U.S.-based Lyondell Chemical's plastics division for $2.45 billion in March. The unit makes chemicals used in the production of products ranging from garbage bags to sports equipment.
Chemicals sales grew 17 percent to 2.1 billion, but the company said growth of both the polymers and chemicals segments were reduced by sharp increases in raw materials prices.
Health care sales rose 21 percent to 4.7 billion while its operating earnings soared 68 percent to 726 million, amid strong demand for its cholesterol-lowering agent Bacol/Lipobay as well as anti-infective medication Cipro and its new respiratory antibiotic, Avelox/Avalox.
"The upward business trend has been maintained," said Bayer Chairman Manfred Schneider. "I continue to anticipate double-digit growth in both sales and earnings. We expect this growth to come primarily from the health care segment, where we see further potential for growth in light of increasing demand for our products."
In early trading in Frankfurt, Bayer shares slipped 0.54, or 1.2 percent, to 43.86. Drug stocks were taking a hit across Europe amid news Wednesday that a U.S. court opened the door to generic competition for Eli Lilly and Co.'s (LLY: Research, Estimates) patent for its popular antidepressant Prozac, reversing a lower court's ruling that would have delayed cheaper versions of the drug through 2003. 
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Bayer
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