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Legal woes hit Bayer profits in second quarter

German chemicals giant Bayer said Thursday it had suffered a net loss in the second quarter due to an environmental lawsuit in the United States, while raising its outlook for the year.

Between April and June, Bayer booked a net loss of 298 million euros ($303 million), after a 2.3-billion-euro loss in the same period last year.

The result was dragged into the red by a 694-million-euro provision to manage legal risks in the United States related to PCB, a product formerly marketed by Bayer’s troubled subsidiary Monsanto.

Nonetheless, Bayer CEO Werner Baumann said in a statement that the group had a “strong operational performance” in the quarter.

Sales in its agricultural business climbed by 17.2 percent to 6.5 billion euros on the back of rising prices.

Sales of consumer health products rose 6.8 percent to 1.5 billion, while the improvement in pharmaceuticals was smaller, up 2.1 percent to 4.8 billion euros.

Bayer raised its outlook for the year, predicting revenues to rise to between 47 billion and 48 billion euros, up from its previous estimate of “approximately 46 billion euros”.

The chemicals group also expected an operating — or underlying — profit for the year of around 12.5 billion euros, up from 12 billion euros previously.

Bayer said it did not see any “material financial impact in 2022 from any potential gas supply bottlenecks as a result of the war in Ukraine”.

Germany is reckoning with the possibility that Russia may cut supplies of natural gas and has taken steps towards rationing the fuel.

The local VCI chemicals industry group has previously warned that a cutoff would be a “heart attack for the economy”.

The chemicals industry is reliant on gas as an energy source and as a raw material in production.