Merck KGaA 4Q Net Profit Fell, Warns of Coronavirus Hit

   By Cristina Roca

Merck KGaA said Thursday that its fourth-quarter net profit fell, and warned that it expects its 2020 sales to be hit by the coronavirus.

The German pharmaceuticals and chemicals company made a net profit of 318 million euros ($354.4 million) in the final quarter of 2019, down from EUR2.45 billion during the same period a year earlier.

Net sales for the quarter rose 13% to EUR4.38 billion, slightly higher than analysts' expectations of EUR4.33 billion, according to a consensus estimate provided by FactSet. Sales growth was driven by the health-care and life science business sectors, Merck said.

Sales for the year rose to EUR16.15 billion, growing organically by 5.3%. Merck had guided for organic revenue growth of 3%-5%.

The closely watched company metric Ebitda pre--or earnings before interest, taxes, depreciation and amortization before one-time items--was EUR1.21 billion for the quarter, up from EUR950 million during the same period a year ago.

Merck said it is difficult to determine the effect the coronavirus epidemic will have on its business, but that it is currently working with the assumption that the epidemic will peak during the first quarter of the year and subside over the course of the second. Based on this, the virus should deal a 1% hit on Merck's 2020 sales, the company said.

"Yet, should the crisis grow or trigger a global recession, the company would adapt its business forecast," Merck said.

For 2020, the company guided for strong organic growth in sales and Ebitda pre. It proposed a dividend of EUR1.30 a share, up from EUR1.25 a share the year prior.

Write to Cristina Roca at cristina.roca@dowjones.com

(END) Dow Jones Newswires

March 05, 2020 01:42 ET (06:42 GMT)

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