Fresenius reports ‘strong’ earnings in the second quarter of 2020
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Fresenius Medical Care reported “strong” earnings in the second quarter of 2020 despite the impact of COVID-19 on operations and disruptions in patient care.
“As anticipated, we saw the COVID-19 pandemic spread globally in the second quarter and continue to rise in Latin America and the U.S.,” Rice Powell, CEO of Fresenius Medical Care, said during an earnings call with investors. “In this challenging environment, the wide-ranging measures we took at a very early stage to ensure the continuity and quality of care for our patients are continuing to pay off.”
Revenue increased by 5% to EUR 4,557 million (+5% at constant currency) in the second quarter with organic growth of 4%, according to a company press release. Health care services revenue rose by 5% to EUR 3,614 million (+4% at constant currency), mainly driven by growth in same market treatments and contributions from acquisitions. Health care products revenue grew by 6% and amounted to EUR 943 million (+7% at constant currency). This increase was mainly due to higher sales of products for acute care treatments and disposables for in-center dialysis, the company noted.
Operating income increased by 26% to EUR 656 million (+24% at constant currency), resulting in an operating income margin of 14.4% (Second quarter of 2019: 12%). “Based on a strong underlying business performance, the increase in margin was largely due to the recovery of COVID-19 related negative effects experienced in the first quarter as well as ongoing cost saving measures,” according to the release.
Powell said the company would confirm its 2020 projected targets, with mid to high single-digit growth rates. “On the basis of the neutral net impact of COVID-19 in the first 6 months, Fresenius Medical Care continues to expect both revenue and net income to grow at a mid to high single digit rate in 2020,” he said. “We continue to monitor further impacts of the pandemic and potential restrictions in the different markets,” he said.
The company said it was able to maintain operations in its more than 4,000 dialysis centers worldwide without significant interruptions and minimizing the impact on patients. “The COVID-19 pandemic affected people with advanced kidney disease and the resulting severity of illness generated an increase in hospitalization and mortality rates,” according to the release. “In addition, the pandemic caused an interruption in routine medical visits and necessary hospitalization for many patients with advanced chronic kidney disease needing to consider renal replacement therapy. These two factors impacted the year-on-year growth for the second quarter.”
The company said it has also made important strides in increasing the number of patients who start home dialysis. “In the second quarter, the home dialysis offering in the Europe, Middle East and Africa (EMEA) region was expanded,” according to the release. “The now-completed integration of the NxStage home dialysis products portfolio in the EMEA region enables Fresenius Medical Care to offer even more patients at-home treatment and a wider choice of treatment methods.”
Fresenius said the number of home dialysis treatments increased by 15% in North America compared to the same period in 2019, with home hemodialysis treatments growing by 41%.
“June 2020 was the strongest month on record with regard to the number of patients being trained for home dialysis,” the company noted. “This development will be supported by the rollout of additional 100 transitional care units to assist patients transitioning between modalities or returning to dialysis from transplants.”
As of June 30, 2020, Fresenius Medical Care treated 347,683 patients in 4,036 dialysis clinics worldwide, according to the release.
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