Quarterly figures: Fresenius is making progress with its restructuring: What will happen to the dividend?

The ailing healthcare group Fresenius is making progress with its restructuring.

Quarterly figures: Fresenius is making progress with its restructuring: What will happen to the dividend?

The ailing healthcare group Fresenius is making progress with its restructuring. The third quarter was strong with increases in sales and operating profit, as the DAX company reported on Thursday in Bad Homburg. Germany's largest clinic company Helios and its subsidiary Kabi, which specializes in copycat drugs, earned more than a year ago. Management raised its earnings outlook for the current year. A decision as to whether Fresenius has to forego dividends due to state energy aid is currently pending.

The group had received almost 160 million euros in aid from the federal government by the end of September. By accepting the money, a legal threshold has been exceeded, meaning that no bonuses can be paid to managers and dividends to shareholders for this year. In principle, the money can also be paid back, but this would be expensive for the heavily indebted company. The law will be examined - including for its constitutional conformity, said Fresenius boss Sen on Thursday. “Not all of our shareholders are dividend-oriented,” Sen said.

In the third quarter, group sales increased by two percent year-on-year to just under 5.52 billion euros. The adjusted operating result, with an increase of eight percent to 519 million euros, was better than financial experts expected.

Earnings before interest and taxes adjusted for exchange rate and special effects are now expected to remain more or less stable this year. The group had previously not ruled out a decline in the mid-single-digit percentage range in the worst case scenario.

The bottom line, however, is that Fresenius slipped into the red at 406 million euros due to value adjustments at its dialysis subsidiary Fresenius Medical Care (FMC) - after plus 321 million euros a year ago.

Profit warnings from FMC

FMC in particular slipped into crisis during the pandemic and triggered several profit warnings from the parent company. To ensure that this no longer happens, Fresenius no longer wants to fully include FMC in the balance sheet, but rather only show it as a financial investment - corresponding to Fresenius' share of a good third. The move is expected to take effect in December.

FMC also has a more positive outlook on profit development in 2023. However, sales fell by 3 percent in the third quarter. The bottom line is that the result fell by almost two thirds to 84 million euros.

Fresenius boss Sen is concentrating on the restructuring of the Helios clinic chain and the Kabi pharmaceutical division. He only sees FMC and the clinic service provider Vamed as financial investments. Peripheral businesses are to be sold in order to reduce the high level of debt. Fresenius recently announced that it would be exiting the Peruvian hospital market. Further sales are likely to follow “soon,” Sen indicated.

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