By Milla Nissi

(Reuters) – Fresenius, a German healthcare company, has exceeded market expectations for its first quarter profit. This was due to growth in the generic infusion drug unit in emerging markets.

The group did warn that cost inflation and disruptions to supply chains would increase in the coming year due to Russia’s invasion Ukraine.

Fresenius owns the Helios Hospital chain, Kabi drugmaker, Vamed medical services company Vamed, and Fresenius Medical Care (NYSE) (FMC [NYSE :)).].

CEO Stephan Sturm explained that “The first quarter was brought on by the coronavirus pandemic and the conflict in Ukraine. Supply chain bottlenecks were also a problem. And, in certain cases, significant cost rises.”

According to a special report, the hit from war on its quarterly income of 14-million euros was a 14.-million-euro loss.

In the first quarter of 2018, net income before special items increased 6% to 462million euros ($486million), compared to 430.1 million euro expected by analysts.

“We have made a solid start into 2022 – somewhat better, even, than expected at Fresenius Helios and Fresenius Kabi,” Sturm said.

Kabi manufactures the generic steroid dexamethasone. This drug has been adopted as a standard treatment by COVID-19 patients who are severely ill. It is proven to reduce death rates. Dexamethasone sales were not disclosed by the company.

Kabi saw an increase in operating profits of 29% in emerging markets compared to a decrease of 1% for the entire group.

MANAGEMENT MODIFICATIONS

FMC, a dialysis unit that is separately listed on the stock exchange, announced Tuesday that Rice Powell, its CEO and will be retiring to be succeeded on January 1 by Carla Kriwet.

This quarter saw a decrease in profit at the world’s biggest dialysis provider. It was due to high deaths from pandemics and higher labour costs in the United States.

Fresenius appointed Sara Hennicken, the chief financial officer of the group, effective September 1, to succeed Rachel Empey.

It did not offer any new details about the possible restructuring of its ownership.

Fresenius CEO, February 2012, left the door open to a sale or an initial public offering of Vamed/Helios.

($1 = 0.9510 euros)