Germany Merck sees return to organic earnings growth in 2024
Frankfurt: Merck KGaA forecast a return to modest operating earnings growth this year but only when adjusted for currency headwinds, citing a gradual recovery in demand for specialty materials used to make biotech drugs and semiconductors.
In a statement on Thursday, the German group said that 2024 earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-offs, would likely see "slight-to-moderate" currency-adjusted growth.
Foreign exchange effects are expected to drag earnings lower by between 1% and 4%, it added.
The Life Science division, which makes gear and substances for biotech labs, will see an "inflection point" during the first half of 2024, as drugmakers put in more orders again.
During the pandemic, makers of drugs and vaccines stocked up on Merck's supplies such as filters and bioreactors, which were repurposed for other medical products after the pandemic.
Germany's Merck also predicted a turning point early during the second half of 2024 for chemicals used in semiconductor manufacturing, where it is among the world's largest suppliers.
It also reported 14.2% lower 2023 adjusted EBITDA at 5.9 billion euros ($6.43 billion), which translates into a currency-adjusted decline of 9%, in line with the average analyst estimate posted on the company's website.
Merck's pharmaceuticals unit said it suffered a major setback in December, when its experimental multiple sclerosis (MS) drug fell through in highly anticipated late-stage trials
Original news source: https://www.reuters.com/business/healthcare-pharmaceuticals/merck-kgaa-forecasts-return-organic-earnings-growth-2024-2024-03-07/
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