Bayer’s profits rose due to strong performance and lower legal costs

German agrochemical giant “Bayer” announced on Tuesday that it had returned to profit in the second quarter. This was driven by strong performance in its agricultural business and lower legal costs.

“Bayer” reported that net profit stood at €219 million, compared with a loss of €199 million in the same period last year. Operating profit rose by around 30 per cent at the company’s “Crop Science” division, which produces seeds, soya beans, herbicides and insecticides, but fell slightly in the pharmaceuticals and consumer health divisions, both of which produce medicines.

According to “Bayer”, one-off costs, “largely related” to litigation costs, also fell during the quarter to €172 million, compared with €981 million.

The company has spent more than US$10 billion to settle thousands of cases relating to glyphosate-based herbicides, since it acquired the US agricultural chemicals manufacturer “Monsanto” in 2018, which developed the popular weedkiller “Roundup”.

The International Agency for Research on Cancer classifies glyphosate as a probable human carcinogen. Meanwhile, “Bayer” cites scientific studies and approvals from regulatory authorities in the US and the European Union as evidence that this herbicide is safe.

In June, the company successfully argued before the US Supreme Court that it should be protected from so-called “failure to warn” legal claims in US states, following the US Environmental Protection Agency’s decision that ‘Roundup’ could be sold without any warning label.

„Bayer“ hopes to bring this matter to a close with a US$7.25 billion US dollars and has stated that a favourable ruling by the US Supreme Court would deter any potential withdrawal from this settlement.

“Our risk mitigation strategy is robust, and we have several important milestones ahead of us,” said Bayer’s Chief Executive Bill Anderson on Tuesday.

Meanwhile, sales of glyphosate-based herbicides rose by 12.6 per cent during the quarter, Bayer said. This growth was driven in particular by strong growth in Europe, the Middle East and Africa.