BAYN Bayer AG

   By Joshua Stein 
 

Shares in Bayer AG fell Thursday after it reported a decline in fourth-quarter profit and provided outlook for 2021.

At 1122 GMT, Bayer shares were down 3.8% at EUR53.01.

The German pharmaceutical and chemical conglomerate said net profit for the period fell by around 78% to 308 million euros ($374.9 million) from EUR1.41 billion a year earlier.

For the full year, Bayer swung to a net loss of EUR10.50 billion, compared with a profit of EUR4.09 billion in 2019.

Earnings before interest, taxes, depreciation and amortization before special items came in at EUR2.39 billion for the quarter, down from EUR2.48 billion.

Quarterly sales were at EUR10.00 billion, down from EUR10.75 billion, and slightly lower than analysts' expectations of EUR10.01 billion, according to a consensus provided by Vara Research.

Net debt came in at EUR30.04 billion at the end of 2020, down from EUR34.07 billion in 2019, the company said.

Bayer proposed a dividend of EUR2.00 per share for 2020, in comparison to EUR2.80 the previous year.

Warburg Research analyst Ulrich Huwald said Bayer's sales and adjusted Ebitda came in below expectations and were "disappointing", mainly due to a miss at the company's crop science segment. "The Roundup litigation remains a burden for Bayer with an unforeseeable outcome," Huwald added.

Citi analysts said the company's growing research and development as well as pharma-related investments may preoccupy the market, which could "require a reset of margin expectations at Pharma." Meanwhile, the company faces questions on its ability to attract investors from an ESG perspective, while its pharma outlook may become uncertain when patents for its Xarelto and Eylea drugs run out in the coming years, Citi added.

Bayer said its $2 billion proposal over future litigation regarding its glyphosate-based weedkiller--which it announced earlier in February--is subject to court approval.

Looking ahead, Bayer expects sales between around EUR42 billion and EUR43 billion for 2021, with an Ebitda before special items of EUR11.2 billion to EUR11.5 billion, both on currency-adjusted basis.

The company expects a negative free cash flow of between EUR3 billion and EUR4 billion, which includes EUR8 billion which it has set aside for Roundup-related litigation.

Write to Joshua Stein at joshua.stein@wsj.com

(END) Dow Jones Newswires

February 25, 2021 06:55 ET (11:55 GMT)

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