Dialysis Companies Shine in Difficult Economy

Fresenius, DaVita, and American Renal Holdings (parent company of American Renal Associates)—all providers of outpatient dialysis services—announced better than expected financial results for the year ending December 31, 2011.

Fresenius, the largest global provider of dialysis services and products, saw its net profit for 2011 rise 9.6 percent from a year earlier to €205 million (or $269 million). Parent Fresenius’s fourth-quarter net profit jumped 14 percent to $310 million, while earnings per share rose 14 percent to $1.02. Fresenius Medical Care’s net revenue—dialysis services and products—increased to $3.32 billion in the fourth quarter, up 4.9 percent over the previous year.

Fresenius forecasts 2012 revenue of around $14 billion, helped by acquisitions in the United States and Europe, an 11 percent increase adjusted for accounting changes, and a 13 percent to 15 percent increase in constant currency. The company projected net profit rising to around $1.14 billion in 2012.

Fresenius SE projected sales growth of 10 percent to 13 percent in 2012 and a rise in net income of 8 percent to 11 percent in constant currency, with growth in all business areas.

As of March 31, 2011, Fresenius Medical Care treated 216,942 patients worldwide—a 9 percent increase from the previous year. In North America, they provided dialysis treatments for 138,392 patients, for an increase of 4 percent, with the total number of patients climbing to 139,887 when the 21 clinics managed (and not owned) by Fresenius Medical Care North America are included. The international segment served 78,550 patients, an increase of 20 percent over the prior year.

Rice Powell, who leads Fresenius North America, will succeed Ben Lipps as chief executive and chairman of the management board on January 1, 2013.

The second largest provider, DaVita, reported a fourth quarter profit of more than $148 million, or $1.56 per share, more than doubling the profit reported the year before.

Income from continuing operations attributable to DaVita, Inc., for the year ended December 31, 2011, was $481.8 million, or $4.99 per share. These figures include an after-tax noncash goodwill charge of about $14.4 million for DaVita’s infusion therapy business. DaVita annual revenue climbed to $1.86 billion, up from $1.64 billion for the previous year.

The company reported a total of 5,227,167 treatments in the United States for the fourth quarter of 2011—or 66,167 treatments per day—for a per-day increase of 12.4 percent over the fourth quarter of 2010.

Looking ahead, DaVita’s operating income guidance for 2012 is expected to be in the range of $1.2 billion to $1.3 billion. Estimated operating cash flows for 2012 are in the range of $950 million to $1.050 billion.

American Renal Associates reported revenues for the 3 months and the year ended December 31, 2011, of $93.1 million and $360.1 million, respectively, compared with $81.9 million and $304.9 million, respectively, for the same periods in 2010.

At the end of 2011, American Renal Associates had provided services to 7374 patients at 108 outpatient dialysis centers, an increase over the same time period the previous year when they served 6628 patients at 93 outpatient dialysis centers.

Treatments for the fourth quarter of 2011 totaled 266,313, or 3371 treatments per day: a per-day increase of 11.8 percent over the fourth quarter of 2010. Treatment growth unrelated to acquisitions was 11.3 percent in the fourth quarter.

American Renal Associates Holdings, Inc., is an owner and provider of outpatient kidney dialysis facilities and operates the facilities in partnership with nephrologists throughout the United States.