The German pharmaceutical company, Merck KGaA, made an official statement today, posting a 2.3% rise in second-quarter profit, as the AZ Electronic Materials SAs takeover helped compensate the effect of a stronger euro.
The Chairman of the companys executive board – Mr. Karl-Ludwig Kley said in the statement, which was cited by the Wall Street Journal: “Mercks stronger focus on this attractive region is visibly paying off. The completed acquisition of AZ is also having a positive effect on group sales and Ebitda pre one-time items.”
According to Mercks statement, the companys earnings before interest, taxes, depreciation and amortization excluding one-time items increased by 2.3% from 826.4 million euros over the same period a year ago to 845.7 million euros ($1.1 billion). This result surpassed the median analysts forecasts of 837 million euros.
However, Merck also reported that its income generated from licenses, commissions and royalties fell by 30% on the year. The Germany-based company also revealed that its sales rose by 1.9% from 2.74 billion to 2.8 billion euros thanks as the acquisition of AZ Electronic Materials helped the drug and chemical manufacturer offset the negative currency effects.
As reported by the Wall Street Journal, the company also shared: “Organic growth and the planned efficiency increases should be able to offset the effects of the decline in royalty, license and commission income as well as the negative impact of foreign currency.”
In May, Merck KGaA said that AZ Electronic Materials is expected to generate profit growth until the end of 2014. The company confirmed its projection today. In addition, Mr. Marcus Kuhnert, who is the current Chief Executive Officer of Merck, said in an interview posted by the company on YouTube that the company is to concentrate on deals to build its pharmaceuticals and life-sciences unit called Merck Serono.
Merck KGaA was 2.2% up to trade at 63.77 euros per share by 11:17 GMT. The companys shares have gained 6.37% in the past twelve months, valuing the company at 8.06 billion euros. According to the information published on the Financial Times, the 24 analysts offering 12-month price targets for Merck KgaA have a median target of 65.00 euros, with a high estimate of 79.00 euros and a low estimate of 54.00 euros. The median estimate represents a 4.17% increase from the last price of 62.40 euros.