The hospital and medical group Fresenius wants to reduce its costs because of the stresses caused by the corona pandemic. By 2023, the DAX group wants to achieve improvements in earnings after taxes and minority interests of at least 100 million euros annually, as Fresenius announced on Tuesday in Bad Homburg when presenting its annual figures for 2020.
The se should be in the same range of 100 million euros per year between 2021 and 2023. Fresenius wants to book these as special items. Last year, due to the pandemic, the group posted a 4 percent drop in adjusted earnings to just under 1.8 billion euros.
The subsidiary Fresenius Medical Care is also working on its costs. In order to reduce this sustainably, the dialysis provider is investing up to 500 million euros in the renovation by 2025. For every euro invested, the company expects an improvement in operating profit of at least the same amount in 2025./tav/stk
Fresenius achieves 2020 annual targets
The health group achieved its goals last year despite persistent COVID-19 pollution. As the Bad Homburg DAX group announced, net profit adjusted for currency and special factors decreased by 4 percent to 1.796 billion euros in 2020 as a whole. Here, Fresenius had targeted growth at the lower end of the range of minus 4 percent to plus 1 percent compared to the previous year.
Adjusted for currency effects, sales increased by 5 percent to 36.3 billion euros. Fresenius SE & Co KGaA had set itself the goal of an adjusted increase of between 3 and 6 percent compared to the previous year’s figure of 35.4 billion euros.
In the final quarter of 2020, sales remained at 9.3 billion euros. Adjusted for currency effects, growth was 5 percent. EBIT before special items was 1.251 billion euros. This corresponds to a decrease of 3 percent or a currency-adjusted increase of 2 percent. Adjusted profit after taxes and third parties decreased by 2 percent (currency-adjusted plus 2 percent) to 494 million euros.
FMC achieves 2020 targets – impairment charges 4th quarter
The dialysis service provider Fresenius Medical Care (FMC) felt the negative effects of the COVID-19 pandemic last year, but was able to almost compensate for them, not least thanks to government support. As already known, a valuation allowance of around 195 million euros in the Latin America segment had a negative impact in the final quarter.
The largest subsidiary of the health care group Fresenius only earned 462 million euros from 616 million euros in the same period last year. After taxes and third parties, profit dropped to 177 million euros from 343 million a year ago. Without considering the aforementioned special effect, FMC would have earned 372 million euros.
FMC already had in the wake of Profit warning announced at the beginning of the month that it had achieved the targets for 2020 and that the net profit was slightly above the target range. As the Bad Homburg DAX group announced in detail, sales increased by 2 percent (currency-adjusted 5 percent) to 17.86 billion euros.
The bottom line is that FMC earned 1.164 billion euros or 1.359 billion excluding special items. This corresponds to a decrease of 3 percent or an increase of 10 (currency-adjusted 12) percent without taking into account the impairment in Latin America.
For the past year, FMC had set itself the goal of increasing both net profit and sales including corona effects in the mid to high single-digit percentage range after currency adjustments.
Jefferies leaves Fresenius share at “underperform” – target of 33 euros
The market should focus on the outlook and cost reduction measures. Some are likely to be disappointed by the forecast for the operating result (EBIT) of the subsidiary Kabi.
The Fresenius share gains 0.84 percent at times in XETRA trading to EUR 36.18. FMC paper meanwhile rose by 0.27 percent to 58.52 euros. Both papers traded even lower in early trading.
BAD HOMBURG / FRANKFURT (dpa-AFX / Dow Jones Newswires)
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