By Jan Hromadko
FRANKFURT-- ThyssenKrupp AG raised its profit outlook slightly
for this fiscal year after cost cutting, better heavy-equipment
sales, and proceeds from asset disposals helped the German steel
and engineering group notch up its first net profit in seven
quarters.
The company, whose products range from flat carbon steel to
elevators, car parts, and industrial machinery, is in the middle of
one of the most comprehensive reorganizations in its more than
200-year history to reduce its debt. ThyssenKrupp is cutting
thousands of jobs, selling assets and reducing investment.
"We have achieved positive net income for the first time in
seven quarters. This shows that our efficiency program is working,"
said Chief Executive Heinrich Hiesinger.
Second-quarter net profit amounted to 271 million euros ($372.9
million), up considerably from the net loss of EUR131 million
posted a year earlier. The figure exceeded the EUR84 million
average of analysts' net profit forecast.
The company said it now expects earnings before interest and
taxes, adjusted for nonrecurring charges and gains, to "almost
double" from the EUR586 million recorded last year.
Revenue is expected to increase by a "medium to higher
single-digit percentage," it added. Initially, the company had
expected its revenue this fiscal year to increase by a medium
single-digit percentage, while adjusted EBIT was forecast to rise
to around EUR1 billion. ThyssenKrupp's fiscal year ends Sept.
30.
Signs of ThyssenKrupp's turnaround come as other European
steelmakers grapple with volatile markets around the world.
ArcelorMittal, the world's largest steelmaker by output, Monday
said it narrowed its loss in its first quarter partly because of
rising demand from U.S. auto makers. It also said that European
demand is improving though the Luxembourg-based company warned of
continued overcapacity and projected falling demand in the former
Soviet Union because of the crisis in Ukraine where it owns one of
the world's largest steelmaking complexes.
In the three months through March, ThyssenKrupp's closely
watched adjusted earnings before interest and taxes was 60% higher
at EUR309 million, on an 8% increase in revenue to EUR10.3 billion.
Analysts had forecast an adjusted EBIT of EUR297 million and
revenue of EUR9.94 billion.
The company attributed the better-than-expected results to its
cost-cutting program, through which it hopes to slash EUR2 billion
of operating costs through fiscal 2015. Additionally, strong demand
for its capital goods businesses, including the elevators unit, and
the disposal of unprofitable businesses helped raise second-quarter
profits.
The company, whose products range from flat carbon steel to
elevators and escalators to car components and industrial plants,
is in the midst of one of the most comprehensive reorganizations in
its more than 200-year history. In an effort to bring down its
large debt pile, ThyssenKrupp is cutting thousands of jobs, selling
assets and reducing investment.
At the end of the fiscal second quarter, net debt stood at EUR4
billion, down from EUR5 billion at the end of September.
Write to Jan Hromadko at jan.hromadko@wsj.com
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