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Last Updated: Tuesday, 11 November, 2003, 11:31 GMT
Bayer profits dip ahead of revamp
Lipobay
Bayer's Lipobay was withdrawn in 2001
German drugs giant Bayer has turned in sharply lower profits as it gears up for a major restructuring exercise.

The company made 21m euros (15m) before interest and tax between July and September, 98% down on the year.

Sales slipped 8% to 6.8bn euros, largely because of the dollar's decline against the single currency.

The gloomy results come as Bayer prepares to shore up its finances by selling its chemicals business and scaling back its US operations.

Bayer chief executive Werner Wenning said there was little prospect of an economic rebound in the months ahead.

Debt objective

"We do not anticipate a sustained economic recovery before the end of the year," he said in a statement.

However, he said profits before taxes, interest payments and one-off costs would rise by a double digit percentage for the year as a whole.

Mr Wenning added that Bayer had hit its annual debt reduction target three months ahead of schedule, and would pay back more of its borrowings by the end of the year.

Investors reacted cautiously, marking Bayer shares up 1.3% to 22.5 euros in morning trade.

Analysts said the rise reflected relief that the firm had managed to avoid slipping into the red.

"There was not an operating loss in the third quarter. This is important," said Meng Si at Bankgesellschaft Berlin.

Lipobay legacy

Last week, Bayer announced plans to float most of its industrial chemicals and polymers operations as a separate stock market-listed company.

It said it would also withdraw from pharmaceutical research in the US and Japan, freeing itself up to concentrate on higher-margin specialty drugs in its European markets.

The overhaul comes in response to a series of setbacks, notably the forced withdrawal in 2001 of Bayer's anti-cholesterol drug Baycol, also known as Lipobay, which had been linked with a rare muscle-wasting syndrome.

The company is currently fighting thousands of lawsuits filed by former Lipobay users.

Bayer said on Tuesday it had so far paid out $659m (395m) to settle 1,811 lawsuits, with a further 11,459 still outstanding.




SEE ALSO:
Bayer sticks to profit target
06 Aug 03  |  Business
Drug giants in $350m fraud rap
16 Apr 03  |  Business
Bayer wins second Baycol case
04 Apr 03  |  Business
Bayer stock surges on court win
18 Mar 03  |  Business


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