(Reuters) – German healthcare group Fresenius SE cut its full-year earnings outlook due to cost inflation at its kidney dialysis subsidiary Fresenius Medical Care (FMC), it said late on Wednesday.
In an unscheduled statement on Wednesday, the healthcare group said it expects group sales to grow in a low-to-mid single-digit percentage range in 2022, down from its previous forecast of a mid-single-digit percentage range.
The company expects group net income to decline in a low-to-mid single-digit percentage range, it added.
FMC also cut its 2022 earnings outlook and withdrew its 2025 targets. It now expects sales growth at the lower end of the previous forecast range and a decline in net income in the high teens percentage range this year.
FMC said increased staff shortages, higher turnover rates and growing reliance on contract labour in the United States pushed costs further, in addition to non-wage cost and supply chain disruptions which also took a toll on earnings.
“At the end of the first quarter we assumed extended labour shortages but clearly did not expect such a significant and rapid deterioration,” FMC Chief Financial Officer Helen Giza said in a statement.
FMC’s net income fell by 33% in the second quarter year-on-year to 147 million euros ($149.87 million), despite a 10% rise in revenue in the quarter, preliminary results showed.
In February, parent company Fresenius increased its cost savings target to at least 150 million euros per year after tax, up from a previous goal of more than 100 million euros.
Both Fresenius and FMC were due to release detailed results on Aug. 2.
($1 = 0.9809 euro)
(Reporting by Ludwig Burger and Riham Alkousaa in Berlin; Editing by Chris Reese and Matthew Lewis)
