Bayer 4Q Net Profit Slumped on U.S. Tax Reform -- Update

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 [e-mail]

(END) Dow Jones Newswires

February 28, 2018 02:52 ET (07:52 GMT)

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