Merck KGaA Shares Fall After Warning of Challenges Ahead

By Adria Calatayud

Shares in Germany's Merck KGaA fell in early trade Thursday and then pared losses after the life-sciences and electronics group warned that 2023 will be a challenging year with cost inflation and slowing sales.

At 0912 GMT, shares in Merck were down 0.4% at 176.45 euros ($188.28), having earlier fallen to a low of EUR170.25.

A slowing semiconductor market, falling Covid-19-related demand and high inflation will make 2023 a challenging year, the company said.

Merck expects so-called Ebitda pre--a closely-watched company metric which measures earnings before interest, taxes, depreciation and amortization before one-time items--to be hit by cost inflation, leading to a result that should range from a moderate decline to a broadly stable performance on an organic basis. Net sales are expected to range from slight to solid organic growth.

Foreign-exchange movements are forecast to hurt both net sales and Ebitda pre by 1% to 4%, Merck said.

For the fourth quarter, Merck reported a net profit of EUR655 million, down from EUR802.1 million in the year-earlier period, on net sales that rose 8.6% to EUR5.66 billion. Quarterly Ebitda pre grew 11% to EUR1.63 million. This missed consensus expectations of a quarterly Ebitda pre of EUR1.69 billion on net sales of EUR5.68 billion, according to estimates provided by the company.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

March 02, 2023 04:35 ET (09:35 GMT)

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