The healthcare group and its dialysis subsidiary Fresenius Medical Care are lowering their annual targets for the second year in a row.
(Photo: dpa)
Frankfurt A lack of staff and rising costs are forcing the DAX group Fresenius Medical Care (FMC) to withdraw its annual targets. This also affects the parent company Fresenius, which also lowers its forecast. Fresenius, which is also listed in the Dax, also corrected the medium-term goals downwards, FMC is canceling its planning for 2025 entirely.
The dialysis group now expects sales growth for the current year at the lower end of the previous forecast range and a decline in consolidated earnings in the high teens percentage range, as the company announced late Wednesday evening. Previously, FMC had planned to grow revenue and net income by a low to mid-single-digit percentage on a currency-neutral basis.
“At the end of the first quarter, we expected a prolonged labor shortage. However, we could not foresee such a clear and rapid tightening at the time,” said FMC CFO Helen Giza. “Increasing staff shortages, higher fluctuation rates and increasing dependence on temporary workers are increasing our cost base.” In addition, the already difficult overall economic environment has continued to deteriorate. In addition, there would be further increasing impairments in the supply chains.
CEO Rice Powell is now retiring a little earlier. The new CEO Carla Kriwet – who last worked for the household appliance manufacturer BSH – is now scheduled to start on October 1st and not in January as planned. FMC is also considering accelerating and expanding its savings program.
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It is the second year in a row that Fresenius Medical Care has had to scale back its profit targets and that the parent company is also being dragged along. FMC contributes almost half of Fresenius’ sales and operating result.
High mortality of dialysis patients and corona pandemic as the cause
The parent company, which achieved sales of around 37.5 billion euros and a profit of 1.8 billion euros last year, controls FMC via the structure of a limited partnership on shares. Last year, the high mortality rate of dialysis patients in the corona pandemic was cited as the main reason for the decline in profits.
Due to the situation at FMC, Fresenius now assumes that currency-adjusted earnings in the current year will fall in the low to mid-single-digit percentage range. Sales are expected to increase in the low to medium percentage range. So far, the company had promised to increase profits in the low single-digit percentage range and sales in the mid-single-digit percentage range.
However, various special effects, such as the effects of the Ukraine war, are not included in the forecast. The acquisitions made this year, such as the acquisition of the pharmaceutical company mAbxience, have not yet been taken into account. Neither does the impact of major gas or electricity supply disruptions in Europe.
The negative effects of the Ukraine war, for example, amounted to EUR 20 million in consolidated earnings in the first half of 2022 and are treated as special items, as Fresenius also announced with the presentation of the preliminary figures for the second quarter.
After that, consolidated profit fell by five percent to 450 million euros – currency-adjusted by minus nine percent. Compared to the same quarter of the previous year, sales rose by eight percent to ten billion euros, a currency-adjusted increase of three percent.
Fresenius Medical Care was able to increase sales by ten percent to EUR 4.76 billion, but the growth was only one percent after adjusting for currency effects. Group profit fell by a third to 147 million euros. Currency-adjusted and calculated without special effects, profit fell by seven percent to 225 million euros.
More: Fresenius wants to cut 2,000 jobs in the Kabi drug division worldwide