Fresenius forecasts 2020 profit growth driven by drug, dialysis units
By Zuzanna Szymanska
(Reuters) - German healthcare group Fresenius <FREG.DE> said it expects net income to increase in 2020 after strong growth in its dialysis business, and in its infusion drugs unit in emerging markets, helped it to just beat fourth quarter expectations.
Following a tumultuous 2018 when Fresenius issued several profit warnings, last year was marked by investment and stabilisation, with the group's management pointing to an improvement from 2020 onwards.
Separately-listed dialysis unit Fresenius Medical Care <FMEG.DE>, which generated 49% of the group's quarterly revenue, on Wednesday reported in-line results saying record growth in home care dialysis offset the one-off effects of an ongoing legal dispute.
Home care has been a growth area for the world's largest kidney dialysis provider, but it has been critical of hard targets set by President Donald Trump's administration for treating more patients with kidney disease at home.
While the company is confident the administration will soften its initial goals in this area, FMC expects home dialysis to account for between 25% and 30% of treatments in the U.S. by 2025, up from 13% now, Chief Executive Rice Powell told Reuters.
Despite some softness in North America, group fourth-quarter adjusted operating income came in at 1.29 billion euros (1.08 billion pounds), slightly above the 1.25 billion euros expected on average by analysts in a company-provided consensus.
Fresenius said it expected 2020 net income to rise between 1% and 5% in constant currency terms and confirmed mid-term forecasts, saying growth, efficiency improvements and its biosimilars business should all bolster earnings.
It said it was too early to quantify the impact of the coronavirus outbreak in China, which has killed 2,100 and infected 74,000 while disrupting the global economy.
Chief Executive Stephan Sturm told a news conference the infusion drugs division Kabi was the most exposed, but the effect would likely not be significant for the unit or group.
In a separate statement, Fresenius announced a joint venture between Kabi and Swiss rival Vifor Pharma <VIFN.S> to provide iron deficiency treatments in China.
The group's Helios hospital division, which has continued to stabilise in Germany and grow in Spain, will keep looking for opportunities to expand this year after making several acquisitions in Colombia, Sturm said.
Fresenius shares closed 2.3% higher while FMC ended the day up 3.7%.
(Reporting by Zuzanna Szymanska in Gdansk; Additional reporting by Ludwig Burger in Frankfurt and Milla Nissi in Gdansk; Editing by Tomasz Janowski, Kirsten Donovan)
