Hard truths about steel

13 May 2014 By Olaf Storbeck

The German industrialist’s restructuring is gaining ground. Investors have responded with enthusiasm to a stronger balance sheet, rising earnings and a better outlook. But the lacklustre steel unit remains a big drag. There are no quick fixes.

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Shares in Germany’s ThyssenKrupp rose more than 5 percent on May 13 after the German maker of steel, elevators, automotive parts and chemical plants lifted its outlook for its current business year. The company said it now saw adjusted earnings before interest and tax (EBIT) almost doubling from 586 million euros ($806 million) in its fiscal year through to the end of September, compared to a previous forecast of about 1 billion euros.

The group posted its first quarterly net profit in two years, beating analyst estimates, thanks to one-off gains from the sale of less profitable activities. ThyssenKrupp still expects a fourth straight net loss for the year to the end of September.

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