* FMC sees 2014 net profit of $1-1.05 bln
* Reuters poll avg for 2014 net profit was $1.19 bln
* FMC to close some U.S. dialysis clinics in savings drive
* CEO says would consider bid for Swedish rival Diaverum
* FMC shares drop over 7 pct, parent Fresenius drops 8 pct
(Adds CEO comments on Diaverum, cost cuts, analyst comment)
By Maria Sheahan and Andreas Kröner
FRANKFURT, Feb 25 Fresenius Medical Care
, which makes kidney dialysis machines, forecast a
shock fall in net profit for this year due to healthcare
spending cuts in the United States.
Shares in the German company, which operates more than a
third of dialysis treatment centres in the United States,
dropped almost 6 percent on Tuesday after it reported its first
decline in annual net profit in 12 years.
Fresenius Medical Care (FMC) makes about a third of its
revenue from Medicare, a U.S. government healthcare programme
for elderly and disabled people.
The U.S. federal agency that sets reimbursement rates for
Medicare said in November it would spread a 9.4 percent cut,
initially proposed to take effect in 2014, over the next three
to four years.
"Looking ahead we are faced with a challenging environment,
in particular with structural changes due to growing pressure on
reimbursement systems," FMC Chief Executive Rice Powell said.
FMC said it expected a 2014 net profit of between $1 billion
and $1.05 billion, compared with $1.11 billion last year and
analysts' average forecast of $1.19 billion in a Reuters poll.
DZ Bank analyst Sven Kuerten said FMC's forecast for a
second successive fall in annual profit was particularly
surprising since the reimbursement cuts announced in November
were not as harsh as had been expected.
Analysts at Berenberg said FMC's outlook was "shocking."
FMC's closest rival in the United States, DaVita, by
contrast, raised its 2014 operating profit outlook earlier this
month due to a slower rollout of new U.S. health insurance
exchanges, where individuals can buy health coverage with
income-based government subsidies.
Fresenius, the diversified healthcare group that
controls FMC, also issued a disappointing 2014 outlook on
Tuesday. It expects only 2-5 percent profit growth at constant
currencies, slowing from a 12 percent gain to 1.05 billion euros
($1.4 billion) last year.
But it forecast annual net profit to jump to between 1.4
billion and 1.5 billion euros by 2017 as a result of its recent
purchase of hospitals from Germany's Rhoen-Klinikum.
FMC's shares closed 5.7 percent lower at 49.82 euros, the
biggest faller on Germany's blue-chip DAX index.
Fresenius stock was down 4.2 percent at 114.05 euros.
FMC launched a cost-cutting programme last year to cope with
tougher conditions in the United States as part of which it
could shut a ten or more clinics and freeze hiring.
"We will close clinics that are not profitable and don't
have any prospects," Powell said. He said closures were most
likely in metropolitan areas where there are multiple facilities
for patients to choose from.
FMC has 3,250 clinics worldwide, more than 2,000 of which
are in North America.
The cost-cutting programme should yield savings of up to $60
million this year and higher sums in 2015 and 2016. Powell said
the programme should be largely complete by 2016 or 2017.
FMC is looking for growth elsewhere and Powell said he would
consider buying Swedish rival Diaverum if owner
Bridgepoint put it up for sale.
Bridgepoint has been looking to offload the Swedish dialysis
clinic operator, which could fetch more than 1 billion euros.
Sources told Reuters last year that Bridgepoint had hired JP
Morgan to review its options.
Any attempt by FMC to buy Diaverum could face opposition
from national anti-trust authorities, bankers have said, but FMC
could allay their concerns by selling off parts of the company.
"We have been talking to anti-trust authorities about such
issues before," Powell said.
($1 = 0.7285 euros)
(Editing by Mark Potter and Erica Billingham)