Bayer Made A Loss of More Than 10 Billion Euros

The pharmaceutical and chemical giant has had a difficult year.

The settlement of the glyphosate lawsuits in the USA and billions in write-offs in the agricultural business resulted in a record net loss for Bayer. In 2020, the group’s loss was 10.5 billion euros, as Bayer announced on Thursday.

The result was expected after the group announced an out-of-court settlement on glyphosate in summer 2020. However, Bayer shares lost more than four percent at the start of trading.

Around 90,000 lawsuits have now been settled in the USA, but the legal dispute is not over yet. The number of cases is estimated at up to 125,000.

This also concerns future lawsuits that Bayer intends to settle or defend against using separate proceedings. The group has submitted a new proposal to a court in the USA, which it still has to decide.

Provisions for legal disputes also had a negative impact, as Bayer announced on Thursday. Adjusted operating profit (Ebitda) stagnated almost at € 11.46 billion in 2020. In the fourth quarter it missed with 2.39 billion, a decrease of more than three percent, the analysts expectations of an average of 2.45 billion. The annual turnover shrank due to negative exchange rate effects by almost five percent to 41.4 billion euros.

Adjusted for currency effects, Bayer expects sales of around 42 to 43 billion euros and an adjusted operating profit of 11.2 billion to 11.5 billion euros for 2021.

After Bayer lost billions in the past year, the shareholders of the pharmaceutical and chemical company have to be satisfied with less dividends. According to a statement on Thursday, they should receive 2.00 euros per share, after 2.80 euros in the previous year. At the current price level, that still means a dividend yield of around 3.6 percent. Billions in provisions for the glyphosate legal disputes in the USA and high depreciation in the agricultural sector broke the Dax group in 2020 a loss of 10.5 billion euros.

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