April 12, 2018 / 12:20 PM / in 9 months

Gerresheimer eyes second half recovery after first-quarter profit fall

FRANKFURT (Reuters) - German drugs-packaging maker Gerresheimer (GXIG.DE) said it was looking for an improvement in results in the second half of the year after a drop in first quarter earnings.

The company’s share slid 4.9 percent following the results, the second-worst performance on the MDax index of German medium-sized companies .MDAXI.

Gerresheimer’s major pharmaceutical customers have been more cautious in placing orders due to uncertainty over the new U.S. administration’s policies regarding health care and import tariffs.

Chief Financial Officer Rainer Beaujean told journalists he expected better results in the second half, citing a slow recovery in the U.S. market, revenues from newly launched products, and its business with cosmetic glass in Europe and pharmaceutical glass in China.

Gerresheimer’s first quarter sales fell 4 percent to 290 million euros ($358 million) as a weaker dollar weighed on the value of overseas revenues, while adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 7 percent at constant exchange rates to 54.9 million euros.

The Duesseldorf-based company said the U.S. tax reform boosted its first quarter net income to 58.1 million euro compared to last year’s 18.7 million euro.

Gerresheimer confirmed its forecast that full-year revenues would at least match last year’s figure of 1.35 billion euros or rise to as much as 1.4 billion euros at constant exchange rates.

Berenberg analyst Scott Bardo said the adjusted EBITDA were “a couple of millions shy”, but that Gerresheimer had put the worst behind it.

Independent Research analyst Bernhard Weininger said the prospects for Gerresheimer remained challenging, especially with regard to the most important customer group of pharmaceutical companies.

Reporting by Riham Alkousaa; Editing by Ludwig Burger and Victoria Bryan

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