Merck KGaA revises profit forecasts to decline due to COVID in 2023
2023.03.02 03:08
Merck KGaA revises profit forecasts to decline due to COVID in 2023
By Ray Johnson
Budrigannews.com – Merck KGaA, a German pharmaceutical company, said on Thursday that earnings in 2023 would decline as a result of a decline in demand for its lab supplies related to COVID from drug and vaccine manufacturers and a decline at its electronic chemicals unit.
According to a statement, the company “assumes a moderate decline to an about stable development” for EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2023, adjusted for one-time items. This is before taking into account fluctuations in currency.
According to the manufacturer of specialty chemicals, lab equipment, and pharmaceuticals, negative effects on the foreign currency would probably be an additional drag of between one percent and four percent.
“Overall, Merck anticipates a challenging year in 2023.” “This will be contributed to by the slowing semiconductor market, decreasing demand related to Covid-19, and persistently high inflation,” the family-controlled organization stated in a statement.
It added that lab supplies related to COVID-19 would likely bring in 250 million euros, down from 800 million euros the previous year.
Pfizer, a pharmaceutical company (NYSE:), NASDAQ: Moderna, NASDAQ: Gilead After making billions from pandemic-related products for the previous two years, Roche has this year warned of a drop in sales.
Despite this, Belen Garijo, the chief executive officer of Merck, maintained the German company’s target of 25 billion euros (or $26.6 billion) in sales by 2025—an increase from the previous year’s 22.2 billion—citing the development of new products and a diversified business.
Two significant trial outcomes, which are anticipated at the end of the year, may improve Merck’s drug business’s long-term earnings prospects, according to analysts.
One is a drug candidate for the next generation of multiple sclerosis for which Merck is ahead of Novartis and Sanofi (NASDAQ:) in the development race. xevinapant, an experimental treatment for head and neck cancer, and Roche.
Additionally, Merck reported that adjusted EBITDA for the fourth quarter increased 11% to 1.63 billion euros, slightly below the average estimate of 1.69 billion euros derived from an analyst poll conducted on the company’s website.
