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Fresenius cuts 2020 outlook on pandemic impact

(Reuters) - German healthcare group Fresenius FREG.DE cut its 2020 profit and revenue targets on Thursday as the COVID-19 pandemic hit elective procedures and delayed product launches, outweighing a strong performance in dialysis.

FILE PHOTO: Fresenius headquarters in Bad Homburg near Frankfurt, Germany, February 27, 2018. REUTERS/Ralph Orlowski

In its first forecasts factoring in the impact of the pandemic, the company said it expected adjusted net income this year within a range of down 4% to up 1% from last year, and revenue growth of 3-6%.

That compares with previous forecasts for growth of 1-5%, and 4-7%, respectively.

The company’s shares were down 4.2% at 1320 GMT.

“Our base case is that a major second COVID-19 wave in our relevant markets can be prevented. Instead, we should continue to see local and regional outbreaks,” Chief Executive Stephan Sturm said in a conference call.

The pandemic has been a mixed blessing for healthcare companies, bringing increased demand for selected products and services but also delays in treatments and extra expenses.

While the number of post-acute treatments should gradually recover, postponed site inspections will cut Fresenius’ 2020 product launches by about 30% and project delays may last well into the second half, Sturm said.

Fresenius’ second-quarter net income came in at 410 million euros (370.5 million pounds), down 13% year-on-year but above analysts’ mean forecast of 398 million euros in a company-provided poll.

The company pointed to easing demand for painkillers and sedatives to treat seriously ill COVID-19 patients after a surge in the first quarter, and a slower-than-expected recovery in China after its coronavirus outbreak was brought under control.

Fresenius Medical Care FMEG.DE, the group's separately listed dialysis unit, confirmed its 2020 targets, citing a strong underlying performance and receding pandemic effects, after reporting second-quarter net income 8% above consensus.

Reporting by Zuzanna Szymanska and Milla Nissi in Gdansk; Editing by David Holmes and Mark Potter