Fresenius SE Forecasts Profit to Exceed 1 Billion Euros
Fresenius SE (FRE) said it expects profit will exceed 1 billion euros ($1.3 billion) in 2013, one year earlier than forecast, as its Kabi intravenous drugs and devices unit contributes to growth.
Sales will probably rise 7 percent to 10 percent this year in constant currencies, while adjusted net income is set to increase 7 percent to 12 percent, the Bad Homburg, Germany-based company said in a statement today. The average estimate for 2013 profit was 1.03 billion euros, based on 15 forecasts compiled by Bloomberg. The shares rose the most since Jan. 16.
The German health company is depending on Kabi, which sells therapies and drugs administered intravenously to hospital patients, after last year’s failed attempt to buy German hospital operator Rhoen-Klinikum AG. (RHK) Fresenius also owns health- care services unit Vamed and Helios, a German private hospital provider. Fresenius agreed in July to buy Fenwal Inc., a provider of blood and plasma collection technology, to expand Kabi’s U.S. reach.
Fresenius turned in “a decent performance,” somewhat ahead of expectations and will probably meet the expectations of investors with its forecast, Sven Kuerten, a Frankfurt-based analyst for DZ Bank AG, wrote in a note to investors today. Kuerten has a buy recommendation on the stock.
Fresenius also said its fourth-quarter earnings before interest and tax rose 9.3 percent to 766 million euros. Sales climbed 18 percent to 5.19 billion euros. The stock rose 2.8 percent to close at 93.50 euros in Frankfurt.
The company also owns about 30 percent of Fresenius Medical Care AG, the world’s biggest provider of kidney dialysis. Fresenius Medical Care said today fourth-quarter Ebit fell 4.7 percent to $559.1 million. Sales increased 13 percent to $3.71 billion.
Fresenius Medical Care shares rose 1.5 percent to close at 53.09 euros.
This year sales will probably exceed $14.6 billion, while net income will be $1.1 billion to $1.2 billion, the dialysis unit said. The company said it expects to spend about $300 million on acquisitions.
“Importantly, the guidance in 2013 looks to be in line with estimates,” said Lisa Bedell Clive, a London-based analyst for Sanford C. Bernstein Ltd. Clive rates Fresenius Medical Care’s shares outperform. The company’s forecast includes any potential impact from U.S. spending cuts scheduled to start March 1, she said.
“This is a company that is used to operating in a tough reimbursement environment, so we think they’re well-placed to weather the storm,” Clive said.
Fresenius Medical Care’s revenue per treatment, a measure of profitability, increased to $368 in U.S. clinics from $351 a year earlier. North American sales rose 19 percent to $2.43 billion.
Outside the U.S., Fresenius Medical Care’s international revenue rose 4 percent to $1.27 billion.
Fresenius Medical Care proposed a dividend increase of 9 percent to 75 cents for ordinary shares. Parent company Fresenius proposed a dividend boost of 16 percent to 1.10 euros, its 20th consecutive increase.
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