German drug major Merck KgaA (MKGAY.PK) reported Thursday higher net profit in its second quarter with increased sales. The company generated improved sales in Healthcare and Life Science segments, and all regions except Europe. Meanwhile, EBITDA, a key earnings metric, declined. Looking ahead, the company maintained its fiscal 2017 adjusted earnings view, but trimmed sales forecast on exchange rate impacts.
For the second quarter, profit after tax climbed 34.6 percent to 423 million euros from 314 million euros last year. Earnings per share grew 34.7 percent to 0.97 euro from 0.72 euro a year ago.
Earnings per share pre exceptionals were 1.54 euros, compared to 1.55 euros last year.
Operating result or EBIT increased 14 percent to 628 million euros, and margin grew to 16.1 percent from 14.5 percent last year.
EBITDA, meanwhile, dropped 5.8 percent to 1.01 billion euros, and margin dropped to 25.9 percent from 28.1 percent a year ago. EBITDA pre exceptionals1 was down 5.6 percent to 1.09 billion euros, and margin declined to 28.1 percent from 30.4 percent a year ago.
Net sales increased 2.3 percent to 3.89 billion euros from 3.81 billion euros last year. The slight sales increase was due to organic growth generated by the Healthcare and Life Science business sectors, the company noted.
With organic sales growth of 2.6 percent, Healthcare sector generated sales of 1.78 billion euros, accounting for an unchanged 46 percent of Group sales. Life Science achieved a growth rate of 4.6 percent, largely thanks to organic sales increases, and accounted for 38 percent of Group sales. Performance Materials business sector reported a slight decrease in sales.
Sales in Europe declined 1.5 percent, while all other regions posted improved results.
Looking ahead, for fiscal 2017, Merck continues to project adjusted earnings per share of 6.15 euros to 6.50 euros, compared to last year’s 6.21 euros. The company still expects that Group EBITDA pre exceptionals between 4.4 billion euros and 4.6 billion euros.
The company now assumes that foreign exchange rate effects will be neutral, compared to the previous view of a slight positive effect of 1 percent to 2 percent on net sales.
Owing to the new exchange rate expectations, the company now forecast net sales of 15.3 billion euros to 15.7 billion euros for the Merck Group in 2017. This is in comparison to previously expected net sales of between 15.5 billion euros and 16.0 billion euros.
Merck said it continues to expect slight…