Bayer's profit jumped thanks ot its acquisition of Monsanto, but it did not report setting aside any money for the legal drama surrounding a flagship weedkiller that is alleged to have caused cancer — AFP FRANKFURT AM MAIN, Feb 27 (AFP): The acquisition of seeds and pesticides maker Monsanto remained both boon and burden for German chemical and pharma giant Bayer in 2019, ensuring bumper profits but miring the company in tens of thousands of legal disputes over a key weedkiller.
"We met our financial goals, even though we had to battle a difficult market environment, especially in the agricultural sector," chief executive Werner Baumann said Thursday as he presented Bayer's annual results.
Net profit leaped 141 per cent year-on-year, to 4.1 billion euros ($4.5 billion), beating forecasts from analysts surveyed by Factset.
Much of the effect was down to the full integration of Monsanto into Bayer's business after the mid-2018 takeover.
Operating profit at the group's crop science unit jumped 80 per cent.
But Bayer also reported it had been served with around 48,600 American lawsuits -- up from 42,700 in October -- over Monsanto weedkiller glyphosate, a vital ingredient in widely-used products like Roundup.
Plaintiffs argue glyphosate caused their cancers, but Bayer insists the science shows its chemical is safe and is "vigorously" appealing first-instance court decisions against it.
"If necessary, we will appeal through every court," chief executive Baumann said, noting that the US Environmental Protection Agency in January reiterated its judgement that glyphosate presents no health risks.
Bayer did not report setting any cash aside in provisions to cover potential court-ordered payouts or a settlement in the glyphosate cases, which analysts have reckoned at up to $20 billion.
The group is in court-ordered mediation talks with plaintiffs and bosses "want to reach as far as possible a solution that closes this issue for good," Baumann said.
He would not be drawn on how much a settlement might cost, or on media reports it could include an end to sales of Roundup to private individuals.
The group also plans to appeal a court ruling that its herbicide dicamba destroyed a US farmer's peach orchards, one of 140 lawsuits pending in America over the chemical.
In a separate press release, Bayer said it would publish expert legal opinions on its acquisition of Monsanto and bosses' judgements of the associated risks, in response to shareholder pressure.
The group suffered an unprecedented slap when investors voted against executives at last year's annual shareholder meeting.
On Wednesday Bayer had announced that supervisory board chairman Werner Wenning will step down early.
The 73-year-old, who was chief executive until 2010, was seen as a key backer of the Monsanto merger and mentor to present CEO Baumann.
North America was the focus of headwinds for Bayer's agriculture business in 2019, as falling acreage of soybeans, competition, adverse weather and trade conflicts weighed on revenues.
Worldwide, sales were down slightly on 2018 when presented as if Monsanto had been part of the business since January 1 that year.
Aside from the US, drought in Australia and African swine fever weighed on business, finance director Wolfgang Nickl said, while Latin America was a bright spot.
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