Fresenius Medical profit drops less than feared, labour shortages ease

By Ludwig Burger

FRANKFURT (Reuters) -Fresenius Medical Care said on Tuesday labour shortages were slowly easing as the German dialysis specialist reported a drop in first-quarter adjusted operating income that was not as steep as some analysts had expected.

Adjusted operating income dropped to 354 million euros ($390 million), compared with the median analysts' estimate of 335 million posted on the company's website.

"The first quarter confirmed the trends towards improving treatment volumes and towards a stabilizing labor environment in the U.S," said CEO Helen Giza.

It confirmed its full-year outlook, saying adjusted operating income would likely remain flat or decline by up to a "high-single digit" percentage in 2023, which it has described as a transition year towards earnings growth recovery in 2024.

The dialysis group's parent, German healthcare group Fresenius SE has said this year it would cede control over the struggling dialysis firm, but keep its stake for now as part of a turnaround plan.

Fresenius said on Tuesday it was on track with those plans.

The move has been viewed by some investors as a prelude to an eventual sale of its stake in the dialysis group.

Fresenius Medical, which was hit hard by a high rate of COVID-19 deaths among its patients, said this burden was easing, though excess mortality continued to weigh on growth.

Its parent Fresenius said on Tuesday first-quarter operating earnings slipped a currency-adjusted 10%, also a better-than-expected result.

Shares in Fresenius Medical gained 1.4% at the open, while parent Fresenius' stock rose 3% to a two-month high.

"This is a good start to the year with improving fundamental signs in the business," Barclays analysts said.

Fresenius parent group CEO Michael Sen, who took over the helm last October, is cutting costs and has said the group would focus on generic hospital drugs unit Kabi and hospitals operator Helios, while Fresenius Medical and hospital project development firm Vamed would be treated as financial investments.

(Reporting by Ludwig Burger; Editing by Sherry Jacob-Phillipsand Bernadette Baum)