BERLIN (dpa-AFX) - German drugmaker Merck KgaA (MKGAY.PK) reported Thursday that its fourth-quarter profit more than doubled from last year on favorable one-time effects on income tax, a better operational performance as well as positive foreign exchange rates. Further, the company announced higher dividend, and expects higher profit and sales in 2013 as well as 2014.
In its recently concluded fourth quarter, net income climbed 104.5 percent to 271.8 million euros from 132.9 million euros last year. Earnings per share surged to 1.25 euros from prior year's 0.61 euros. Earnings per share pre one-time items were 2.05 euros this quarter, 23.5 percent higher than last year.
The company's key operational indicator, earnings before interest, taxes, depreciation, amortization, or EBITDA, excluding one-time items, grew 16.1 percent to 789.8 million euros. EBITDA margin was 29.1 percent, higher than prior year's 27 percent.
The firm's total revenues increased 8 percent to 2.83 billion euros and sales rose 7.4 percent to 2.71 billion euros. The sales growth reflected 5.6 percent organic growth and 1.8 percent from changes in foreign exchange rates, primarily owing to a stronger U.S. dollar.
Segment-wise, Merck Serono's revenues were benefited by strong performance in North America and Emerging Markets, despite challenging business conditions in Europe, impacted by lower pricing as well as healthcare budget cuts.
Merck's largest single product, Rebif, for the treatment of relapsing forms of MS increased, primarily as a result of price increases in the United States. Sales of the targeted cancer treatment Erbitux also generated growth.
For fiscal 2012, net income dropped 6.6 percent to 566.7 million euros or 2.61 euros per share mainly on impairments, while adjusted earnings per share grew 12.1 percent to 7.61 euros. Total revenues rose 8.7 percent to 11.17 billion euros, and sales increased 8.4 percent.
Further, the company said it would propose to the Annual General Meeting on April 26 a 13 percent increase in dividend to 1.70 euros per share, demonstrating the strength of its underlying business.
Going ahead, Merck expects sales to grow organically at a moderate pace in both 2013 and 2014. On a reported basis, a stronger euro may lead to negative currency effects in comparison to 2012.
Adjusted EBITDA is expected to rise faster than sales as a result of net cost savings realized from the Group-wide restructuring program 'Fit for 2018'. With one-time costs peaking in 2012, this should lead to a significant increase in net income in 2013 and 2014, Merck added.
The company now expects its goal of total annual savings by 2018 of 385 million euros from 'Fit for 2018' initiative, higher than previous forecast of 365 million euros because of the reorganization that began in the Pigments business.
On Frankfurt's Xetra, Merck shares closed Wednesday's trading at 109.05 euros, down 0.90 euros or 0.82 percent.
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