Bayer Faces $9.4 Billion Euro Loss in Q3

Bayer encountered impairment charges of 9.25 billion euros ($10.79 billion), and said the costs of its settlement over claims its Roundup weedkiller causes cancer would be even higher than expected. Bayer was caught up in issues with Roundup as a result of its 2018 takeover of Monsanto, which made it the world's largest supplier of seeds and pesticides.

The write-downs, driven by weaker demand from farmers due to low biofuel prices, coupled with a $750 million cost increase of dealing with US prosecution, resulted in a loss before interest and tax of 9.4 billion euros in Q3.

"The impact of the (coronavirus) pandemic is placing additional strain on our Crop Science Division. We are also facing negative currency effects,” Bayer’s Chief Financial Officer - Wolfgang Nickl commented.

The company had predicted impairment charges in the end of September to sum up to several billion euros on agricultural assets, and forecasted a slight decline in 2021 core earnings per share. The company struck an $11 billion outline agreement with US plaintiffs' lawyers in June, but a judge later took issue with a side arrangement on future cases that may yet be lodged, otherwise known as a class plan. This would prove $750 million more costly.

"Bayer took an additional provision in the third quarter to cover the increased cost of a revised class plan, as it is far enough along in the negotiations to know that the new plan will come in at approximately 2 billion U.S. dollars, an increase over the original cost of 1.25 billion U.S. dollars," the company said.

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