Herbicide windfall helps Bayer make better-than-expected profit

Agricultural and pharmaceutical company Bayer reported better-than-expected quarterly earnings as a temporary rise in the price of its glyphosate-based herbicides offset declining sales of its stroke-prevention pill Xarelto.

The German company said in a statement on Tuesday (8) that adjusted third-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17.3% to 2.45 billion euros ($2. 45 billion), above the average analyst estimate of 2.31 billion euros released on the market.

Bayer, which acquired glyphosate products as part of its acquisition of Monsanto, is benefiting from an approximately 2.5-fold jump in average glyphosate prices since early 2021 after Hurricane Ida damaged competing producers, the report said. CEO Werner Baumann to reporters on a conference call.

But finance chief Wolfgang Nickl said prices had already started to fall during the third quarter. “We expect them to normalize further in the fourth quarter,” he added.

Bayer said its full-year outlook issued in August still stands, but added cost inflation will continue into next year. Its shares fell 2.4%, wiping out gains in the previous two trading sessions, with analysts voicing concerns about the cost outlook.

Bayer was hit by litigation costs over cancer claims by primarily individual users of glyphosate herbicides, but demand for the products from farmers, the agricultural science unit’s main customer group, was not affected.

A recent streak of five court victories has encouraged Bayer to be stricter on legal settlements, which have cost billions so far, even after regulators declared the products safe.

The Agricultural Sciences division saw Adjusted Ebtida gain 33.5% to €629 million, beating a market consensus of €589 million as a strong glyphosate business more than offset weaker corn and soybeans after US farmers reduced planting due to drought.