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Chinese competition and costs weigh on Merck KGaA outlook

Reuters  |  DARMSTADT, Germany 

DARMSTADT, (Reuters) - Germany's KGaA expects a fall in operating profit this year before a rise next, it said on Thursday, citing Chinese competition in used in flat screens and higher expenses.

The and said 2018 adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) on a currency-adjusted basis would decline and expects foreign exchange rates to have a 4-6 percent negative impact.

Launch costs for multiple sclerosis pill and funds for research on cancer drug hopeful are also being budgeted for, the company said.

reported 1 billion euros ($1.24 billion) in fourth quarter adjusted EBITDA, down 6.5 percent and broadly in line with market expectations.

Its consumer health business with vitamin brands such as Neurobion and Femibion, which is trying to sell, reported a 10 percent rise in currency-adjusted revenue to 225 million euros.

Merck said it was confident it would return to operating income growth in 2019 as and new drug sales rebound.

Merck, which is working with to widen the use of immuno-oncology drug Bavencio, is reviving plans to bring an oral to the U.S. market, despite regulatory concerns about side effects having frustrated its ambitions there almost seven years ago.

($1 = 0.8061 euros)

(Reporting by Patricia Weiss; writing by Ludwig Burger; editing by Edward Taylor and Jason Neely)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 16:31 IST