By Christopher Alessi
ESSEN, Germany--German steelmaker ThyssenKrupp AG said on
Thursday it had resumed its dividend payment and reported its first
annual net profit in four years, driven by strong growth in the
group's capital goods businesses.
Net profit for the fiscal year ended Sept. 30 was EUR210 million
euros ($262.4 million), compared with a loss of EUR1.44 billion a
year earlier.
The group reported a net profit from continuing operations of
EUR24 million, missing analysts' expectations. Analysts had
predicted a profit of EUR65 million, according to a recent poll by
The Wall Street Journal.
Sales in the latest reporting period rose 4% to EUR41.3 billion
from EUR38.78 billion a year earlier, boosted by strong sales in
its elevator-technology and industrial-solutions divisions.
Adjusted earnings before interest and taxes jumped to EUR1.33
billion from EUR517 million year-over-year, helped by increased
earnings in the group's capital-goods businesses.
The company reported a fourth-quarter net loss of EUR33 million,
compared with a loss of EUR909 million a year earlier, due to legal
costs and restructuring in the elevator-technology and
material-services businesses. Quarterly sales rose to EUR11.16
billion from EUR9.91 billion a year earlier.
ThyssenKrupp proposed its first shareholder dividend in three
years at EUR0.11 per-share. "It is a signal to our shareholders
that we have reached a turning point in our earnings development
and that we have faith in our future earnings," ThyssenKrupp Chief
Executive Heinrich Hiesinger said.
ThyssenKrupp said it expects adjusted EBIT for the 2014-2015
fiscal year to rise to at least EUR1.5 billion, slightly ahead of
analysts' forecasts. But Mr. Hiesinger said the company would need
to raise its earnings above EUR2 billion EBIT to improve its cash
flow.
"We still don't have a good balance sheet," Mr. Hiesinger
said.
Analysts at DZ Bank called the dividend "a little bit surprising
given the tense balance-sheet situation."
Mr. Hiesinger, who took the helm in 2011, has implemented a
comprehensive restructuring over the past few years that includes
thousands of job cuts and reduced investment to increase the
group's cash flow. He has sought to refocus the company away from
its traditional steel business and more on capital goods like
elevators, car components and industrial machinery.
The capital goods businesses--which include Components
Technology, Industrial Solutions and Elevator Technology--increased
their total adjusted earnings before interest and taxes by 13%,
with Industrial Solutions leading the way with a 15% rise. The
industrial-solutions division builds naval submarines and frigates
and provides engineering services for chemical plant
construction.
Adjusted EBIT for the Materials Service business declined by
10%, hurt by the reintegration of alloys unit VDM and Italian
stainless-steel mill Terni. ThyssenKrupp had sold the units to
Finland's Outokumpu in 2012 but was forced to take them back last
year when the Finish group faced financial difficulties.
Mr. Hiesinger has said he would like to resell the two
struggling units, which generated a loss before taxes of EUR55
million, after implementing fresh restructuring and cost-cutting
measures.
The company's European steel business saw a decline in volumes,
driven in-part by the disposal of specialty automobile steel parts
unit and weaker steel prices in Europe.
However, the group saw a 19% jump in order volumes at 4.4
million tons in its Americas steel business, helped by positive
price effects in the North American flat steel market. The ailing
Americas division also experienced stronger earnings growth, due
in-part to the removal of negative earnings contributions from the
company's U.S. steel plant.
ThyssenKrupp sold in February for $1.55 billion its
Alabama-based steel rolling and coating plant to ArcelorMittal and
Nippon Steel & Sumitomo Metal Corp. As part of the deal, the
new owners are required to buy two million metric tons of steel
slabs from ThyssenKrupp's Brazilian steel plant over six years.
Write to Christopher Alessi at christopher.alessi@wsj.com
Access Investor Kit for ThyssenKrupp AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007500001
Subscribe to WSJ: http://online.wsj.com?mod=djnwires