Bayer undergoing a year of transition

Bayer has reported second quarter profits of €293m (US$286m), almost 50% down on the same period last year. Chairman Werner Wenning said the firm had seen no sustained recovery in customer demand in a difficult business climate. The company is still struggling after a series of problems last year, headed by the global withdrawal of its blockbuster Lipobay in August 2001.

Sales fell 7% to €7.3bn ($7.1bn) in the second quarter, affected by the withdrawal of Lipobay, which was also primarily responsible for a 40% drop in operating profit for the quarter to €318m ($311m). However, Kogenate, the haemophilia treatment beset by production problems last year, recorded sales up 75% in the first half of 2002 to €176m ($172m).

Despite implementing a recovery programme expected to yield €1.8bn ($1.8bn) by 2005, Bayer's financial situation is still being heavily undermined by the loss of Lipobay. However, the company expects net income to exceed last year's as a result of divestments

'2002 is a year of transition in which we are creating the basis for future growth,' commented Wenning. Bayer will press ahead with the implementation of the cost structure programmes announced last year, he added.