German healthcare group Freseniusraised its full-year revenue target on Tuesday as strong generic drug sales in emerging markets helped offset a softer performance in the U.S. generics business and at its key dialysis unit.
Fresenius highlighted continued strong growth of its generic infusions unit Kabi in markets including China, Asia-Pacific and Latin America, while noting increased competition and easing shortages in the U.S. market.
The parent said it now expected full-year revenue growth of between 4% and 7% at constant currency rates, compared with a previous range of 3% to 6%. The outlook includes the sales and earnings effects of its February acquisition of U.S. home dialysis firm NxStage, Fresenius said.
“We are reporting a good second quarter 2019, with healthy organic growth in all four business segments,” Fresenius Chief Executive Stephan Sturm said in a statement. “We are very confident about the second half and the coming years.”
The positive update contrasted with last October when the group cut its earnings target for the year, citing slower growth in dialysis services in North America, its largest market, sparking one of its biggest-ever daily share declines.
The separately listed dialysis unit Fresenius Medical Care (FMC) maintained its 2019 revenue and income outlook after reporting adjusted second-quarter revenue of 4.28 billion euros (£3.93 billion), below the 4.35 billion expected on average by analysts in a Refinitiv poll.
The group also said its hospitals division Helios, which had long acted as a drag on its results due to decreasing admissions and staff shortages in Germany, recorded strong organic sales growth in its home market.
“Helios is no longer a reason for major concerns,” Bankhaus Lampe said in a note. “The key message, in our view, is that the results of Fresenius Helios appear to be stabilising earlier than anticipated.”
Fresenius said its comparable group second-quarter core operating profit (EBIT) fell by 7% in currency-adjusted terms to 1.08 billion euros, while currency-adjusted revenue rose 6% to 8.8 billion euros, broadly in line with analysts’ expectations.
Dialysis specialist Fresenius Medical repeated it welcomed U.S. President Donald Trump’s administration goals to move more kidney disease treatment into patients’ homes, saying it supported the company’s investment in home dialysis.
Fresenius Medical will continue to increase the number of treatments it carries out in the home setting in North America, it said.
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