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FMC sees further profit growth in 2009 Dialysis provider Fresenius Medical Care aims to increase net

Dialysis provider Fresenius Medical Care aims to increase net profits further this year after reporting a fourth quarter increase, as the recession fails to dampen demand for patient care in its sector.

Chief Executive Ben Lipps said recently that FMC, which dominates the US dialysis market along with rival DaVita, could benefit from an economic slump as costs decline while the need to treat life-threatening kidney conditions remains.

Fourth-quarter net income rose 9% as patient numbers increased along with drug and medical-equipment sales, FMC said on Thursday.

Net income at the world's largest dialysis provider, which generates about two-thirds of its sales in North America, came in at $214 million, compared with an average estimate of $213 million in a Reuters survey of 16 analysts.

FMC said it expected net income of $850 to $890 million this year, up from $818 million in 2008, making it one of only a handful of German blue-chip companies to issue a specific outlook for 2009.

Revenue should rise too, to above $11.1 billion from $10.6 billion, it said, after quarterly revenue rose 6% to $2.722 billion, matching estimates.

The stock market values FMC shares at about 13.5 times estimated 2009 earnings, according to StarMine, which weighs analysts forecast based on their track records.

They trade above the average multiple of 12.5 for global healthcare service providers as market participants see more visibility for FMC's future income than for some peers.

German healthcare conglomerate Fresenius, which controls FMC, also predicted earnings growth for this year, helped by its acquisition of APP, a US-based supplier of generic intravenous drugs.

The group's net income, adjusted for special items and currency effects, should increase about 10%, it said.

Fresenius, which traces its roots back to a 15th century pharmacy, last year bought APP for an initial $3.7 billion.

APP became the sole provider of heparin - a key dialysis drug - in the United States after fatalities forced a competitor to recall its blood thinner in early 2008.

Fresenius's fourth-quarter adjusted earnings before interest and taxes (EBIT) rose 22% to €518 million, a figure in line with consensus.

Analysts, however, did not foresee exceptional charges as US accounting rules forced Fresenius to write off the part of the takeover price that it had ascribed to APP's research and development efforts. Including these effects, EBIT stagnated at €424 million. (Reuters)