Fresenius Posts Higher 2Q Profit Despite Currency Pressure, Slow China Growth

By Dan Michaels

FRANKFURT--German health care group Fresenius SE (FRE.XE) Thursday reported higher net profit in the second quarter and raised its sales outlook despite currency pressures and slow growth in China

The company posted second-quarter group net profit of 286 million euros ($383.2 million), an 18% increase compared with a year earlier and beating analysts' expectations of EUR265 million.

Group sales for the second quarter rose 8% on the year to EUR5.52 billion, and second-quarter earnings before interest, taxes depreciation and amortization rose 7% on the year, to EUR1.01 billion.

Revenue from its hospital division, Helios, rose 52% to EUR1.29 billion, benefiting from the company's integration of hospital chain Rhoen-Klinikum, which Fresenius acquired last year.

Its Kabi business unit, which sells intravenous drugs and has faced increased competition, saw flat second-quarter of sales of EUR1.25 billion and falling net income, down 10% to EUR111 million.

"The integration of the newly acquired hospitals is fully on track and we are pleased with their strong financial performance. Kabi saw growing business momentum in all key markets," said Chairman Ulf Mark Schneider.

The company offered no new information about a joint venture with two partner firms in Russia, Sistema JSFC and Zenitco Finance Management LLC, and the Fresenius Kabi division in Russia.

The joint venture was announced in April and criticized by many German politicians, who said it sent the wrong signal after the U.S. and European Union launched their first round of sanctions against Russia.

Fresenius Medical Care, a separately listed dialysis provider that is 30% own by Fresenius SE, posted a net profit decline of 5.7% on the year to $281 million. It is struggling in the U.S. with flat Medicare rates and slow growth in commercial medical rates.

Its second-quarter sales rose 6.2% on the year to $3.83 billion.

The second-quarter figures still beat analysts' expectations for Fresenius Medical Care. A Dow Jones poll of analysts forecast net profits of $248 million and second-quarter sales of $3.75 billion.

Write to Dan Michaels at [e-mail]

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