FMC AG anticipates a 25% income drop in 2021 due to COVID-19 deaths
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Fresenius Medical Care AG anticipates “significant negative impact” on net income this year due to thousands of patients who have died from COVID-19, the company announced prior to release of its fourth-quarter earnings.
The news sent FMC AG stock price tumbling 18.5%, losing more than $10 share after hitting a high price of $44.13 in November 2020.
“The excess mortality trend significantly accelerated in the U.S. and in [Europe, the Middle East and Africa] EMEA in particular in November and December 2020 and accumulated to approximately 10,000 patients in 2020 over the pre-pandemic baseline,” according to a company press release. “The accelerating effects of excess mortality due to the COVID-19 pandemic are continuing into 2021 and are expected to have a significant adverse annualization effect on treatment volumes.”
As a result, FMC AG said it anticipates revenue growth “of up to mid-single digits and assumes net income before potential restructuring measures to decline by up to 25[%]” in 2021.
Based on preliminary numbers, overall financial targets were achieved for 2020, with net income “slightly above the top end of the target range,” the company said. Personal protective equipment for employees and patients, as well as higher compensation for employees working in isolation clinics established for patients with the virus, resulted in “significantly increased costs in the dialysis services business, which in 2020 was largely compensated by governmental support, in particular in the U.S., accelerated efficiency measures and a strong products business development,” the company said.
Final results for the financial year 2020 and the targets for 2021 will be released on Feb. 23.
FMC AG treats 349,167 patients through its network of 4,073 dialysis clinics around the world.
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