Fresenius Profit Rises on Dialysis Demand

Fresenius Profit Rises on Dialysis Demand
Copyright 2010 by Virgo Publishing.
http://www.renalbusiness.com/
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Posted on: 08/04/2010

FRANKFURT— Fresenius Medical Care AG & Co. KGaA reported Aug. 3 an increase in profits, which was driven by an increase in the earning per treatment in the United States.

Fresenius’s net profit for the second quarter of 2010 was $248 million, an increase of 12 percent compared to the same quarter of 2009.

Net revenue for the second quarter of 2010 increased by 7 percent to $2.95 billion compared to the second quarter of 2009. Dialysis services revenue grew by 8 percent to $2.22 billion in the second quarter of 2010. Dialysis product revenue rose by 2 percent to $722 million in the same period.

North American revenue increased by 8 percent to $2.03 billion. The average revenue per treatment for U.S. clinics increased to $356 in the second quarter of 2010 compared to $344 for the same quarter in 2009 and $355 for the first quarter of 2010. Fresenius said this development was attributable principally to reimbursement increases and increased utilization of pharmaceuticals.

Dialysis product revenue increased by 5 percent to $210 million due to higher sales of hemodialysis disposables and dialysis machines.

In North America, the operating margin increased from 15.9 percent to 16.3 percent in the second quarter of 2010. The margin development was mainly impacted favorably by an increase in revenue per treatment as well as the effect of economies of scale from revenue growth.

In the second quarter of 2010, Fresenius generated $294 million in cash from operations. Free cash flow after acquisitions and divestitures was $107 million compared to $98 million in the second quarter of last year.

As of June 30, Fresenius treated 202,414 patients worldwide, a 6 percent increase compared to the previous year. Including 29 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 136,884.

As of June 30, the company operated a total of 2,599 clinics worldwide, which represents a 5 percent increase compared to the previous year. The number of clinics is comprised of 1,795 clinics in North America (1,824 including managed clinics).

“We have continued to strategically expand our global presence in dialysis services through acquisitions in attractive growing markets such as the Russian Federation and Asia,” Fresenius CEO Ben Lipps said in a statement. “And we look forward to the opportunities posed by the upcoming ‘bundled’ reimbursement system in the U.S.—opportunities we feel we are uniquely poised to seize, given our vertical integration and consistent focus on delivering the best quality care for our patients in the most efficient way possible."

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