German chemical giant Bayer posted second-quarter profits below analyst expectations and unveiled a euro 1.5 billion cost-cutting plan.
Bayer, the inventor of Aspirin a century ago, said its second-quarter operating profit on continuing operations fell 44.8 per cent to euro 508 million on a 2.1 per cent sales increase to euro 8.071 billion.
Bayer, one of the last chemicals/pharmaceuticals hybrids, said it expected the cost-cutting measures to lead to a clear improvement in profitability by 2005.
In its restructuring programme, Bayer plans to save euro 600 million annually in its health-care division, euro 700 million in polymers and euro 200 million in chemicals.
It expects its 2001 healthcare earnings to come in 40-50 per cent below its previous expectations amid problems with haemophilia drug Kogenate as well as Baycol.
The annoucement came a day after it was forced to withdraw a top-selling drug.
Slow economic growth in Europe, Asia and North America forced the Leverkusen-based group to repeat that its recall of anti-cholesterol drug Baycol - due to concerns over potentially deadly side-effects - would send 2001 operating profit below earlier expectations.
The Baycol embarassment reinforced investor concerns Bayer will be unable to survive as an independent drug maker and would be forced to split operations or merge.