Merck KGaA profit dragged lower by liquid crystal decline, forex

  • Merck on Thursday reported 920 million euros ($1.07 billion) in second-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), below market expectations of 960 million.

Germany's Merck KGaA saw adjusted core earnings decline 13.7 percent in the second quarter on lower revenues from liquid crystals used in flat screens and a strong euro weighing on the value of overseas sales.

Merck on Thursday reported 920 million euros ($1.07 billion) in second-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), below market expectations of 960 million.

The chemicals and drugs maker said it expected adjusted EBITDA from continuing operations to decline to 3.75 to 4.0 billion euros in 2018, stripping out the consumer healthcare unit it has agreed to sell to Procter & Gamble for 3.4 billion euros.

That compares with 4.25 billion euros in 2017, excluding consumer health.

Marcus Kuhnert, the chief financial officer of the company, told CNBC that currency pressure has diminished from the first quarter.

A cyclist drives past a logo of drugs and chemicals group Merck KGaA in Darmstadt, Germany.
Ralph Orlowski | Reuters
A cyclist drives past a logo of drugs and chemicals group Merck KGaA in Darmstadt, Germany.

"What we are observing is that currency pressure actually in (the second quarter) was less than in (the first quarter). And given the most recent developments that you've mentioned (appreciation in the dollar) we also see the expected development of currencies in (the third and fourth quarters), so the second-half of the year, a little bit more benign than what we had assumed three months ago," Kuhnert said on "Squawk Box Europe" Thursday.

"We will be back to top line growth from 2020 onwards," he added.