Pharma lends Bayer wings as oil prices maul BASF

Germany's chemicals giants showed sharply differing results on Wednesday, with Bayer enjoying strong growth on pharmaceuticals while oil blackened BASF's outlook.

Chemicals and pharmaceuticals powerhouse Bayer upped its growth forecasts for the year after a strong second quarter saw profits surge by 19 percent.

While revenues fell 1.4 percent to 11.8 billion euros ($13 billion), profits hit 1.4 billion euros -- compared with 1.2 billion in the same period in 2015.

The company pointed to strong growth in sales of prescription and non-prescription drugs as the main contributor to the boost.

?We remain confident about the year as a whole and are raising the Group forecast,? said newly-installed chief executive Werner Baumann.

Bayer's strength stood in stark contrast to BASF, whose second-quarter net profits slid 14 percent to 1.09 billion euros.

Revenues were also down 24 percent to 14.5 billion euros.

BASF "expects continuing challenging conditions and significant risks" over the whole year, it said in a statement in which it confirmed a first-quarter forecast of falling profits.

Chief executive Kurt Bock pointed to low oil and gas prices and an asset swap with Russia's Gazprom to explain the results, adding in a statement that the firm's targets remain "ambitious" given the economic context.

Shares in BASF shed 2.8 percent on the Frankfurt stock market in late morning trading, while Bayer enjoyed a bump of 1.85 percent.

- Pharmaceuticals drive growth -

Bayer's annual revenues are expected to hit around 35 billion euros, excluding income from the recently-separated plastics business Covestro.

Earnings before interest, tax and special items grew 5.7 percent in the second quarter and are expected to see almost 10 percent growth over the whole year -- up from the five percent the firm previously expected.

Bayer's prescription medications division saw sales growth of 5.5 percent to 4.1 billion euros, while sales of over-the-counter medications fell by 2.3 percent to 1.6 billion euros.

Meanwhile, the agrochemicals unit reported that sales shrank by 4.5 percent to 2.5 billion euros.

Baumann blamed an "ongoing weak market environment" for the result, noting that sales at the division remained "steady" with a fall of 0.4 percent when currency and portfolio effects were taken into account.

Bayer has repeatedly courted US agrochemicals and seeds giant Monsanto in a bid to become the world's largest firm in the sector, with its latest offer standing at almost 60 billion euros -- which would make it the largest-ever takeover by a German company.

But managers at the US firm, controversial for its genetically modified crops and widely-used weedkiller Roundup, have continued to hold out for more cash.

The two firms remain in talks -- although Monsanto is reportedly also in talks with BASF over a possible merger of their agrochemicals divisions.