Healthcare group Fresenius raises 2021 forecasts

German healthcare group Fresenius (FREG.DE) raised 2021 targets though it saw a weaker third quarter, saying progress on its cost-cutting plan should offset troubles at its dialysis unit.

The COVID-19 pandemic has affected healthcare groups in different ways as demand for coronavirus-related products and services coincided with the evolution of new coronavirus variants and higher rates of patient deaths.

Fresenius said that while it earlier expected lower pandemic effects in late 2021, new coronavirus variants and exposure to high-risk patients at its dialysis unit Fresenius Medical Care (FMEG.DE) could threaten those assumptions in the third quarter.

“We obviously need to watch the further development and the related knock-on effects of the pandemic here very closely,” Fresenius’ chief executive Stephan Sturm said in a conference call on Friday.

However, higher 2021 numbers are still possible thanks to better-than-expected savings from Fresenius’ cost-cutting plan, Sturm said.

“For starters, we expect low double-digit million euro savings already this year,” the CEO said.

At the same time, the company still did not specify savings measures for FMC, saying it would issue an update in autumn.

Earlier this year, Fresenius sparked speculation it might divest the unit, but Sturm dismissed that possibility on May 21.

“FMC gets us more scale, a higher level of attractiveness in the debt markets and advantages on the tax front,” Sturm said on Friday, adding Fresenius is still analyzing its group structure and may give a further update in February.

In a statement released earlier on Friday, Fresenius said it now saw 2021 net income growing in a low single-digit percentage range and kept expected revenue growth at a low to medium single-digit percentage range, both in constant currency. In May, it said it expected at least broadly stable net income.

($1 = 0.8418 euros)