Bayer aims for a return to growth in its annual adjusted profit

The logo of Bayer AG is pictured during the German drugmaker’s annual earnings news conference in Leverkusen, Germany February 27, 2019. REUTERS/Wolfgang Rattay

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FRANKFURT, March 1 (Reuters) – German diversified group Bayer (BAYGn.DE) is aiming for a return to growth in its adjusted core profit this year, as higher profits in its agricultural division are likely to be tempered by investments in new new genetic processing technologies.

Earnings before interest, tax, depreciation and amortization (EBITDA) before special items is expected to reach €12 billion ($13.4 billion) in 2022, once adjusted for currency fluctuations, up 7% from 11.18 billion euros last year, the company said in a statement on Tuesday.

Bayer reported fourth-quarter adjusted EBITDA flat at 2.4 billion euros, in line with average analyst forecasts, dragging down 2.5% for the full year due to higher costs, negative currency effects and drug development expenses.

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In its presentation slides, the drug and agricultural supplies maker said it is targeting profit growth in its plant science division due to higher prices, market share gains as well as efficiency measures that offset inflationary cost pressures.

Bayer is catching up with its closest rival Corteva (CTVA.N) in the US seed market, offering a soybean variety that is resistant to more weedkillers.

The company warned that its outlook assumes a stable geopolitical environment in Eastern Europe, now challenged by Russia’s invasion of Ukraine.

“Bayer will closely monitor and mitigate these risks where possible,” he added.

The company has built what it describes as one of the industry’s leading cell and gene therapy platforms, bolstering its prospects for long-term drug development but requiring substantial expense.

A successful clinical trial prompted the drugmaker last month to raise its maximum sales estimate for prostate cancer drug Nubeqa to more than 3 billion euros. Read more

($1 = 0.8930 euros)

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Reporting by Ludwig Burger; edited by Miranda Murray and Jason Neely

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