* Q1 net income 435 mln euros vs forecast 411 mln

* Confirms 2021 and medium-term guidance

* Outlines cost cutting plans, FMC to follow

May 6 (Reuters) - German healthcare group Fresenius reported a smaller than expected fall in quarterly net income on Thursday, helped by government aid for its hospitals and lower mortality among dialysis patients as more received COVID-19 vaccines.

The pandemic has had a mixed effect on healthcare groups, as demand for coronavirus-related products and services has come alongside a drop in visits to doctors and a rise in patient deaths.

Fresenius, which controls the world's largest provider of kidney dialysis services and makes COVID-19 treatment dexamethasone, said first-quarter net income fell 2% to 435 million euros ($522 million) on a currency-adjusted basis.

That topped analysts' average forecast of 411 million euros.

"We are determined to bring Fresenius back onto a dynamic earnings growth trajectory. But more near term, we're confirming our full-year guidance for at least broadly stable net income," Chief Executive Stephan Sturm said on a conference call.

While government aid helped Fresenius's German hospitals during the quarter, its drugmaking business Kabi benefitted in China from a pick up in elective procedures as the country recovers from the pandemic.

Sturm said a plan, announced in February, to cut spending by 100 million euros a year in 2021-2023 would involve reducing marketing and logistics costs at Kabi, real estate sales at hospital operator Helios, and simplifying reporting structures between employees at healthcare project manager Vamed.

"I feel encouraged with our target. But it is too early to provide you with a reliable breakdown of the savings into the different businesses," the CEO said.

The group's separately listed dialysis unit Fresenius Medical Care (FMC) will provide details on its own measures in the second quarter as its "more fundamental approach" requires longer preparation, Sturm added.

FMC also reported a better-than-feared quarterly profit, thanks to lower patient deaths as 51% of them had received at least one dose of a COVID-19 vaccine, although high infection rates in some countries limited the recovery.

($1 = 0.8333 euros) (Reporting by Zuzanna Szymanska and Antonis Pothitos in Gdansk. Editing by Tomasz Janowski and Mark Potter)