September 5, 2018 / 6:52 AM / 2 months ago

UPDATE 1-Bayer Q2 core earnings up 3.9 pct thanks to Monsanto takeover

* Q2 adj EBITDA +3.9 pct at 2.34 bln eur

* 2018 adj core EPS to decline to 5.70-5.90 euros

* Bayer pledges to keep div at least flat

* Crop Science up on Brazil, Monsanto

* Earnings at Consumer Healthcare unit continue to slip

* (Adds further details)

By Ludwig Burger

FRANKFURT, Sept 5 (Reuters) - Bayer eked out a 3.9 percent gain in underlying core earnings for the quarter, as a rebound in crop protection and the addition of U.S. seeds maker Monsanto offset weak consumer healthcare sales and unfavourable currency effects.

Second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for one-off items, rose to 2.34 billion euros ($2.71 billion), the company reported on Wednesday, slightly below analyst estimates in a Reuters poll for 2.44 billion on average.

The $63 billion takeover of Monsanto will make Bayer as reliant on farming supplies as on pharmaceuticals for earnings. It is in the midst of an overhaul of its drug research and development activities as it faces calls to beef up its pharma development pipeline.

Adjusted EBITDA at the enlarged Crop Science division, now the world’s largest supplier of seeds and pesticides, almost doubled to a better-than-expected 631 million euros, helped by a recovery in Brazil and as Monsanto, part of Bayer since June 7, contributed 70 million.

Earnings at the Consumer Health unit, meanwhile, dropped 18.5 percent as a weak U.S. dollar weighed on the value of overseas sales and revenues of brands such as Claritin against allergies or the Coppertone sun screen declined further.

Bayer has suffered from U.S. consumers switching from established drugstores to online shops to hunt for bargains.

Bayer now expects EBITDA before special items to increase by a low- to mid-single-digit percentage in 2018. It had previously forecast a decline by a low-single-digit percentage, at the time excluding the effect of the Monsanto acquisition.

But adjusted core earnings per share would likely decline to between 5.70 and 5.90 euros, down from 6.64 a year earlier, because Bayer closed the Monsanto deal closed later than anticipated, missing out on a first half that is typically much stronger for Monsanto than the second.

Bayer said it would still pay out a dividend per share for 2018 that was at least at the year-earlier level, more than its dividend payout policy of 30 to 40 percent of core earnings per share would command.

“We expect the combined business to deliver successful performance and want to enable our shareholders to share in our company’s success,” Chief Executive Werner Baumann said.

$1 = 0.8641 euros Reporting by Ludwig Burger; editing by Brenna Hughes Neghaiwi and Maria Sheahan

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