FRANKFURT (Reuters) – German healthcare group Fresenius said it was examining whether the state aid it received to help offset high energy costs at its hospitals business would bar it from making management bonus and dividend payments.
“Fresenius is examining the pertinent rules and the legal repercussions very carefully at the moment,” a company spokesperson said in a statement, adding it would discuss the matter with a new German regulatory body.
In an interview with Sunday paper Frankfurter Allgemeine Sonntagszeitung made available to Reuters, CEO Michael Sen was asked how the group would deal with a legal provision that bonus and dividend payments could not be paid by companies that accepted state aid.
“The law is complex and not entirely clear,” Sen was quoted as saying. When asked whether the company would legally challenge any ban on payouts, he said that would have to be analysed.
The company paid an unchanged annual dividend of 0.92 euros a share this year, or 518 million euros in total. It has a policy of increasing the payout per share in line with currency-adjusted growth in earnings per share, at least maintaining the previous year’s level.
During the first half of 2023 German hospitals of the group’s Helios division received 88 million euros ($93 million) in government aid to compensate for a rise in energy costs, according to its financial report.
The spokesperson said the assessment would inform a decision on whether state aid will be accepted during the second half. The company declined to comment further.
The Helios unit posted earnings before interest and tax of 622 million euros in the first half against 609 million a year earlier.
CEO Sen took over a year ago and has been restructuring the group, which was hit by a decline in earnings at its kidney dialysis division.
He has been cutting costs, is seeking to reduce the group’s financial debt, and is looking into selling smaller non-core businesses to focus on generic drugs unit Kabi and hospitals operator Helios.
($1 = 0.9451 euros)
(Reporting by Ludwig Burger; Editing by Jan Harvey)