By Ludwig Burger

FRANKFURT (Reuters) -Fresenius Medical Care said on Tuesday labour shortages were slowly easing as the German dialysis specialist reported a drop in its first-quarter adjusted operating income, although not as steep as feared by some analysts.

The company said in a statement on Tuesday its adjusted operating income dropped to 354 million euros ($390 million), compared with the median analysts' estimate of 335 million in a consensus posted on the company's website.

"The first quarter confirmed the trends towards improving treatment volumes and towards a stabilizing labor environment in the U.S," said CEO Helen Giza.

It confirmed its full-year outlook, saying operating income excluding one-offs would likely remain flat or decline by up to a "high-single digit" percentage in 2023, which it has described as a transition year towards earnings growth recovery in 2024.

The dialysis group's parent Fresenius SE has said this year it would cede control over the struggling dialysis firm, but keep its stake for now as part of a turnaround plan.

Fresenius said on Tuesday it was on track with its plans to change Fresenius Medical Care's legal form by the end of this year, translating into a loss of control over strategic decisions and top management appointments to become a minority shareholder.

The move has been viewed by some investors as a prelude to an eventual sale of its stake in the dialysis group.

Fresenius Medical, which was hit hard by a high rate of COVID-19 deaths among its patients, said this burden was easing, though excess mortality for now continued to weigh on growth.

Its parent company, German healthcare group Fresenius, said on Tuesday its first-quarter operating earnings slipped a currency-adjusted 10%.

Fresenius' CEO Michael Sen, a former E.ON and Siemens executive who took over the helm last October, is cutting costs and overhauling the group's structure.

He has said the diversified healthcare group's focus would be on generic hospital drugs unit Kabi and hospitals operator Helios, while Fresenius Medical and hospital project development firm Vamed would be treated as financial investments.

(Reporting by Ludwig Burger, Editing by Rachel More and Sherry Jacob-Phillips)