By Christopher Alessi
ESSEN, Germany--Steelmaker ThyssenKrupp AG said on Thursday it
would resume its dividend payment after it reported its first
annual 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
($262.4 million), compared with a loss of EUR1.44 billion a year
earlier. Annual sales rose 4% to EUR41.3 billion from EUR38.78
billion a year earlier, boosted by strong sales in its elevator and
industrial-solutions divisions.
The company has struggled in recent years as a weak global
economy hurt demand for its products, particularly at its recently
sold Steel Americas division, leading to substantial write downs.
But the German conglomerate appears to be turning the corner amid
heavy restructuring.
For the fourth quarter, ThyssenKrupp reported a net loss of
EUR33 million, compared with a loss of EUR909 million a year
earlier, because of legal costs and restructuring at its
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 a 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 earnings before interest and taxes
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 in the long term to 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 said the dividend was "a little bit
surprising given the tense balance-sheet situation."
Adjusted EBIT for the fiscal year jumped to EUR1.33 billion from
EUR517 million year-over-year, helped by increased earnings in the
group's capital goods businesses.
The group's elevator business was a primary contributor to this
growth, driven by "record sales on the back of new installations in
China and the Americas," according to analysts at the Davy
Group.
Mr. Hiesinger, who took the helm in 2011, has implemented a
comprehensive restructuring strategy 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 reported a 13% rise in adjusted
EBIT led by elevator technology and industrial solutions. The
industrial-solutions division includes the marine systems business,
which builds naval submarines and frigates, as well as an
engineering services unit for chemical plant construction.
Adjusted EBIT for the materials service business, which makes
carbon and stainless steels, 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 posted a decline in
volumes, driven in-part by the disposal of a unit that produced
specialty flat steel for automobiles and weaker steel prices in
Europe.
Steel Americas was the group's only division not to contribute
to adjusted EBIT, even as the business experienced stronger
earnings growth year-on-year because of the disposal of the
company's ailing U.S. steel plant.
In February, ThyssenKrupp sold its Alabama-based steel rolling
and coating plant to ArcelorMittal and Nippon Steel & Sumitomo
Metal Corp. for $1.55 billion. 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
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