Fresenius warns of bigger Ukraine war impact after Q1 profit beat
2022.05.04 13:55
FILE PHOTO: The Fresenius SE headquarters are pictured in Bad Homburg near Frankfurt, Germany February 22, 2017. REUTERS/Ralph Orlowski/File Photo
By Milla Nissi
(Reuters) – German healthcare group Fresenius’s first-quarter profit exceeded market expectations on Wednesday, driven by growth in its generic infusion drugs unit in emerging markets.
However, the group warned cost inflation and supply chain disruptions were likely to increase this year, fuelled by Russia’s invasion of Ukraine.
Fresenius’s businesses include the Helios hospital chain, drugmaker Kabi, medical services firm Vamed and dialysis specialist Fresenius Medical Care (NYSE:FMS) (FMC (NYSE:FMC)).
“The first quarter was burdened by the ongoing coronavirus pandemic, the war in Ukraine, supply chain bottlenecks and, above all, cost increases that are in some cases significant,” CEO Stephan Sturm said.
The group recorded a 14-million-euro hit related to the war to its quarterly income, reported as a special item.
Net income before special items rose 6% to 462 million euros ($486 million) in the first three months of the year, compared with 430.1 million euros expected by analysts.
“We have made a solid start into 2022 – somewhat better, even, than expected at Fresenius Helios and Fresenius Kabi,” Sturm said.
Kabi produces the generic steroid drug dexamethasone, which has become a standard treatment for severely-ill COVID-19 patients after it was shown to cut death rates. The company did not give details on dexamethasone sales.
Kabi’s operating profit increased by 29% in emerging markets, against a 1% decline for the group.
MANAGEMENT CHANGES
Separately listed dialysis unit FMC said on Tuesday its CEO Rice Powell would retire to be succeeded by Carla Kriwet on Jan. 1.
The world’s largest provider of dialysis treatments posted a lower-than-expected profit for the quarter, weighed down by high pandemic-related deaths among its patients and elevated labour costs in the United States.
Fresenius named Sara Hennicken as the group’s chief financial officer effective Sept. 1, succeeding Rachel Empey who has decided to leave the company.
The group did not provide new information regarding the potential revamp of its ownership structure.
Fresenius’s CEO in February left a door open for a sale of FMC or initial public offerings of Vamed and Helios.
($1 = 0.9510 euros)
