Bayer's agriculture business buoyed by higher produce prices in Q1

Bayer said prospects for its agriculture business, the world's largest supplier of seeds and pesticides, have brightened during the first quarter as demand from farmers was improving amid higher produce prices.

"In the agriculture business, in particular, we see a market environment that gives us an increasingly positive perspective," Chief Executive Werner Baumann said in the text of a speech posted on the group's website and which will be delivered at next week's annual shareholder meeting.

He said first-quarter results would be published on May 12 and the start to the year was successful.

"A sizable increase in the demand for agricultural products has led to rising prices. Of course, we hope that this momentum will continue."

The agriculture business, which Bayer boosted with the $63 billion takeover of Monsanto, has been a drag on the diversified group with Bayer saying in February that earnings per share would slip in 2021, disappointing investors.

The CEO on Friday reiterated that 2021 sales would likely grow about 3% with earnings per share coming in slightly below the year-earlier level, when excluding currency swings.

Bayer last month pledged to revive growth in adjusted earnings by 2024, helped by the launch of products such as digital farming services, new soy seeds and non-prescription remedies.

Bayer's stock has recouped losses it suffered in October last year, when it flagged billions of euros in writedowns on agricultural assets.

But litigation continues to be a drag on the shares. An $11 billion outline settlement in June last year of U.S. lawsuits that allege Bayer's Roundup weed killer causes cancer has turned out to be more expensive amid a struggle to finalise the deal.

The CEO reiterated in the speech that a new proposal agreed with plaintiffs’ lawyers has yet to be approved by the judge in the case.