UPDATE 1-ThyssenKrupp sees stronger profits this year


(Adds background, details, share price, previous FRANKFURT)

By Matthias Inverardi

ESSEN, Germany, Dec 20 (Reuters) - German steel and engineering group ThyssenKrupp said on Friday it expected earnings to improve significantly in the current business year on the back of higher global demand for steel.

The company gave no specific forecasts for the year ending September 2003, but Chief Executive Ekkehard Schulz said in a speech that Thyssen aimed for a pre-tax profit of 1.5 billion euros in 2003/04, triple last year's level.

"We are without a doubt on the right track," said Schulz.

The world's number four maker of flat carbon steel and a major producer of automotive parts posted a sharp drop in underlying full-year earnings earlier this month in line with expectations as a weak economy, a slump in steel prices earlier in the year and restructuring costs all took their toll.

Group pre-tax profit before minorities, excluding capital gains, fell 46 percent to 419 million euros ($431 million) in its 2001/02 business year while sales fell three percent to 36.7 billion euros.

The sprawling conglomerate on Friday forecast sales of 38 billion euros for the current business year, up from 36.7 billion before portfolio adjustments last year.

Schulz also said he expected the company to raise its dividend for 2002/03 as earnings grew, from a proposed 0.4 euros for 2001/02.

Thyssen's steel division posted sales of 11.7 billion euros last year, accounting for around a third of group sales, and down from 12.5 billion the previous year.

Although steel prices have picked up from 20-year lows seen earlier in the year, the division's bottom line had not been expected to feel much of the benefit from the rebound until next year, as many of its supply contracts are long-term deals.

Shares in the firm, which have fallen by over a third since the start of the year compared with a slide of around 40 percent on the DAX , were up 1.47 percent by 0922 GMT, in line with the DAX.

The firm said at the beginning of the month it was cutting its debt pile faster than planned, reducing net debt to 4.7 billion euros from 6.4 billion over the course of its fiscal year.

Although the firm has made a raft of disposals of non-core assets in recent years, many analysts would still like to see it broken up, arguing that its complex structure makes it hard for investors to follow.



Follow Us

Sponsored Introduction Continue on to (or wait seconds) ×