By Ludwig Burger
DARMSTADT, Germany (Reuters) - German drugs and chemicals maker Merck KGaA (DE:MRCG) expects adjusted core earnings to increase more than 10 percent this year, banking that additional profit from a takeover of lab supplies maker Sigma-Aldrich will offset higher expenses for drug development.
The group, which is the world's largest maker of liquid crystals for flat screens, said earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-offs, would show a low double-digit percentage gain.
That, however, compares with an average forecast of an 18 percent gain expected by analysts in a Reuters poll.
The $17 billion (12 billion pound) Sigma-Aldrich deal, wrapped up in November, made Merck's Life Science division the world's second-largest supplier of substances and devices for biotech labs and drug companies after Thermo Fisher (N:TMO).
Merck said it would boost spending on development of new immuno-oncology drugs by up to 200 million euros ($220 million) this year. This includes Avelumab, which is it is developing with Pfizer (N:PFE).
In the fourth quarter, adjusted EBITDA rose 6.3 percent to 933 million euros, surpassing an average estimate of 905 million euros from analysts.
Net income came in at 126 million euros, more than 150 million euros short of the consensus, hurt by one-off costs related to the takeover.