Fresenius revises end-of-the-year guidance after drop in North American earnings
Click Here to Manage Email Alerts
Fresenius Medical Care has revised its financial outlook for the full year of 2022 after reporting lower third-quarter revenue from its North American dialysis operations and medical products divisions.
“Fresenius Medical Care continues to operate in a challenging and highly volatile macroeconomic and operational environment. As expected, inflationary developments persisted and weighed on our earnings,” Helen Giza, chief financial officer of Fresenius Medical Care, said in a press release. “While it is disappointing that the execution against our North America recovery plan is delayed, we are confident that the intensified efforts will improve the performance.”
The revised revenue target for 2022 is based on an expectation that income is “now expected to decline in the high teens to mid-20s percentage range,” the company said.
Carla Kriwet, CEO of Fresenius Medical Care, said the drop in earnings signaled “a clear urgency to turn around our operational performance with bold interventions. We are defining a broader turnaround plan, which will also include a culture of performance and accountability,” she said in the release.
The company said the turnaround plan will “address performance issues in North American health care services, the structural cost base of health care products and an extended cost-saving program.
“ ... Fresenius Medical Care will not only simplify its organization and significantly reduce overhead costs but rigorously optimize its portfolio in both – the future care delivery (health care services) and care enablement (health care products) segments. The subsequent capital allocation will focus on profitable growth businesses and improving operational leverage,” according to the release.
Revenue from the company’s global health care services division grew by 16% in the third quarter, mainly driven by organic growth in dialysis services outside the U.S. The company reported negative organic growth in North America due to patient mortality and higher staffing costs from COVID-19 and capacity constraints in certain clinics.
Fresenius said it has made progress on filling staff positions in its dialysis clinics, but continues to face “an unprecedented labor market situation in the U.S., resulting in staff shortages, high turnover rates and meaningfully higher costs,” according to the release. “This has continued to impact growth in U.S. dialysis services, as well as in downstream assets and consequently affected operational leverage in both.”
Mortality among patients on dialysis during the COVID-19 pandemic “was in line with expectations,” the company said. There were 1,100 COVID-19-related deaths among Fresenius Medical Care patients in the third quarter compared with 2,400 in the first quarter and 800 deaths in the second quarter.
“Excess mortality accumulated to approximately 24,600 [patients] since the start of the pandemic,” according to the release.
As of Sept. 30, 2022, Fresenius Medical Care treated 344,593 patients in 4,153 dialysis clinics worldwide and had 122,758 employees (full-time equivalents) globally, compared with 123,528 employees as of Sept. 30, 2021.
Reference:
Fresenius Medical Care revises financial outlook for full year 2022 due to delayed effects from improvements in North American Services business in challenging environment. https://www.freseniusmedicalcare.com/en/news/q3-2022. Published Oct. 30, 2022. Accessed Nov. 17, 2022.
Read more about
Click Here to Manage Email Alerts