By Ludwig Burger
FRANKFURT (Reuters) -Bayer said on Tuesday that last month's cut to its full-year earnings target was mainly driven by a bleaker outlook at its Crop Science division and by expectations for flat pharmaceuticals sales.
The German drugs and pesticides maker said in unscheduled statement last month that it was projecting 2023 group earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-offs, to be in a range of 11.3 billion euros ($12.5 billion) and 11.8 billion euros on a currency-adjusted basis, down from 13.5 billion euros reported for 2022.
It specified in a statement on Tuesday that the adjusted EBITDA margin over 2023 sales at the agriculture business known as Crop Science would be about 21%, down from 25% projected in May.
Currency-adjusted divisional sales would be down by about 5% and not up by about 1.5% as previously seen.
CEO Bill Anderson, a former Roche executive, has had a challenging start since he took the top job in June. Bayer (ETR:BAYGN)'s main agriculture business has been hurt by cost inflation, dry weather weighing on farmers' demand, and by a slump in prices of glyphosate-based weedkillers from last year's highs when revenues were inflated by rivals' production outages.
Prescription drug sales would be flat and not up by about 1% as previously targeted, with the profit margin seen at about 28% this year, down from a previous goal of more than 29%.
Sales of non-prescription consumer health products, the smallest of Bayer's three divisions, were still seen up 5% this year.
Bayer also reported a net loss of 1.89 billion euros for the second quarter, weighed down by 2.3 billion euros in impairment charges.
It had previously cited preliminary figures as showing expected goodwill impairments worth about 2.5 billion euros, leading to a second-quarter net loss of 2 billion euros.