(Berlin) AFP: German chemicals giant Bayer reported yesterday a second-quarter net loss of 9.55 billion euros (US$ 11.26 billion), reflecting the ‘exceptional impact’ of a US settlement of thousands of claims that its glyphosate weed killer may have caused cancer.
The heavy loss compared with a profit of 404 million euros (US$ 475 million) in the same quarter of the previous year.
The huge loss came as Bayer signed in June an agreement worth between US$ 8.8 billion and US$ 9.6 billion to settle some 125,000 claims in the US over the Roundup weed killer it acquired when it bought American agrochemical group Monsanto in 2018. However, in July the company said it was reviewing plans to resolve future litigation after a California judge criticised part of the proposed settlement.
Bayer said at the time that the motion for court approval of the US$ 1.25 billion deal which addresses future claims in the US had been withdrawn to “enable the parties to more comprehensively address the questions” raised.
In addition, Bayer’s pharmaceuticals division took a charge of 1.25 billion euros in the second quarter for litigation, primarily for its permanent birth-control medical device Essure.
The company said it was also hit by the fallout from the coronavirus pandemic, noting that restrictions to prevent transmission of the virus had led to the postponement of non-urgent treatments thereby dampening demand for women’s health, ophthalmology and radiology products.
Stockpiling in the first quarter added to a slight decline in business, although there was “a slight recovery trend toward the end of the second quarter,” the group said.
In the three months to June, sales fell 2.5 percent compared with the same period of last year to 10.7 billion euros.Bayer trimmed its guidance for the year and said it now expects sales for this year to slip to between 43 and 44 billion euros, down from its earlier forecast of between 44 and 45 billion.
Shares in Frankfurt are down 3.3 percent, recovering slightly from an earlier fall of 3.9 percent.