BAYER CONFIDENT OF POSTING GOOD 1987 RESULTS
Chemicals group Bayer
AG <BAYG.F> said it expects to post another good result in 1987
after raising pre-tax profit to a new record high in 1986.
    The company said that this was despite the mark's further
strengthening against the dollar and other currencies and
despite an increase in competitive pressure.
    "The further progress of our business will depend largely on
the extent to which threats to free trade materialise and on
the developments of exchange rates, raw material and energy
costs.
    Bayer said world group pre-tax profit rose to 3.30 billion
marks in 1986, exceeding the previous year's record of 3.15
billion. Parent company pre-tax profit increased to 1.72
billion from 1.62 billion.
    The company gave no net profit figures or any indication of
the likely 1986 dividend. Bayer paid a 10-mark dividend on 1985
results, up one mark from a year earlier.
    Bayer said that world group operating profit declined
slightly in 1986 against 1985 but non-operating results showed
a further improvement.
    Bayer said that the decline in world group turnover to
40.75 billion marks from 45.93 billion in 1985 reflected mainly
the sharp fall in the dollar against the mark.
    Lower prices on the raw material side had also brought
pressure on selling prices, it added.
    In volume terms, however, 1986 sales rose slightly against
1985, the company said without giving details.
    "The western Europe, North America and Far East regions
developed well in local currency, but here too the translation
of local currency sales into marks distorted the picture,
especially in the case of North America," it said.
    Bayer said parent company volume sales were also higher in
1986, although turnover fell 4.3 pct to 16.77 billion marks.
    Capacity use was high at the parent company in 1986,
resulting in a decline in marginal unit costs. This, combined
with savings in raw material and energy costs, helped offset
falling prices and cost increases in other areas.
    The rise in pre-tax parent company profit was due to lower
extraordinary expenses and higher net interest income.
Plastics, organic chemicals, polyurethanes and coating raw
materials all developed well, it said.
    Turning to the 1986 fourth quarter, Bayer said that world
group turnover fell to 9.67 billion marks in the last three
months of 1986 from 10.43 billion in the same 1985 period.
    Parent company turnover in the fourth quarter fell 7.1 pct
to 3.69 billion marks, with domestic turnover 4.1 pct lower and
foreign turnover 8.6 pct lower.
    Exports accounted for 65.3 pct of turnover in the quarter
against 66.4 pct in the same quarter of 1985.
 REUTER
