Bayer's retained chemicals divisions, material science and crop science businesses also helped lift EBIT to €660 million, but as expected healthcare saw declines in both sales and earnings.
Sales in the second quarter rose 4.5 per cent to €7.58 billion. Net income and earnings per share stayed level with the prior year's quarter at €128 million and €0.18, respectively.
Lanxess returned to the black in the second quarter, growing EBIT year on year by €67 million to €20 million. It also boosted sales by 9.7 per cent to €1.59 billion. Bayer said preparations for the spin-off of the company to Bayer's existing shareholders in early 2005 are proceeding on schedule.
Chemical intermediates put in a 6 per cent gain in revenues to €288 million, due particularly to increased sales of basic chemicals in North America and inorganic pigments in Europe.
But the healthcare business saw EBIT drop 44 per cent to €217 million on sales down 4 per cent at €2.1 billion. Earnings were hit by high launch costs for Levitra (vardenafil), its new drug for erectile dysfunction partnered with GlaxoSmithKline, and the absence of special gains recorded in the year-ago period relating to the spin-off of the household insecticides business.
Bayer expects its health care division to receive a substantial boost from the planned acquisition of Roche's consumer health business (subject to approval by the antitrust authorities), which should generate combined sales of €2.4 billion.
Levitra did not live up to expectations, chalking up sales of €40 million in the quarter. And the pharma division was also hit by continued generic competition to its top-selling Cipro (ciprofloxacin) antibiotic, which saw turnover plummet 54 per cent to €202 million in the quarter. Overall, pharma revenues fell by a fifth to €744 million, although biologics fared better with sales up 14 per cent to €296 million.
Bayer crop science's second quarter EBIT more than quadrupled to €159 million due to higher sales and further synergies from the integration of Aventis CropScience, which Bayer bought for €7.25 billion.
Meanwhile, materials science posted a 131 per cent increase in second quarter EBIT to €215 million due to an increase in sales, improved capacity utilisation and cost-containment projects, Bayer said.
Bayer expects EBIT before exceptional items in the second half of 2004 to increase significantly over the same period a year ago, despite the sharp rise in petrochemical raw material costs, said chief executive Werner Wenning in a statement.