STOCKHOLM (Reuters) – Swedish medical equipment maker Getinge reported on Thursday a smaller than expected rise in operating profit but unexpectedly raised its annual dividend to shareholders.

Operating profit was 1.14 billion crowns ($109 million) against a year-ago 828 million and a mean forecast of 1.36 billion in an LSEG poll of analysts, on organic sales growth of 10%.

The maker of products for surgery, intensive care and sterilisation said profit margins were squeezed by costs for quality improvement work in its Acute Care Therapies unit that has been ongoing for nearly a year.

Higher costs for goods and staff also hit profitability.

Order intake grew 4% on the back of acquisitions and currency translations. Organically, however, it shrank by 2%. Getinge said this was mainly due to a tough year-ago comparison in connection with China lifting pandemic restrictions.

“Despite a weaker order intake, the existing order book, and the dialogue we have with customers lead us to expect organic sales growth of 2-5% for 2024,” CEO Mattias Perjos said.

“Two acquisitions completed in Q4 2023 are expected to contribute with 3-5% sales growth in 2024,” he added.

Getinge proposed a dividend for 2023 of 4.40 crowns per share, against 4.25 crowns for 2022 and an expected 4.10 crowns.

The company has earlier warned that quality and supply challenges for its Cardiac Assist and Cardiopulmonary product categories within Acute Care Therapies would hurt its earnings throughout 2023.

($1 = 10.4155 Swedish crowns)

(Reporting by Anna Ringstrom, editing by Terje Solsvik and Essi Lehto)

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