ThyssenKrupp Profits Up 16% in Q3

ThyssenKrupp Profits Up 16% in Q3

While industrial plant technology sales were up, steel sales were down.

Industrial giant ThyssenKrupp (IW 1000/62) said on Friday that windfall gains from divestments lifted earnings in the third quarter, even as orders and revenues were hit by weakening demand.

ThyssenKrupp, which operates its business year from October to September, said that it booked net profit of 238 million euros (US$292 million) in the three months to June.

That represented an increase of 16% over the year-earlier period.

At the same time, operating profit, as measured by earnings before interest and tax (EBIT), plummeted by 79% to 122 million euros, sales slipped by 7% to 10.71 billion euros and orders slumped 21 percent to 10.231 billion euros.

ThyssenKrupp -- which alongside steel also makes elevators, industrial plant technology, submarines and car parts -- said that orders and sales in its materials businesses such as steel were "down due to the weak market environment."

By contrast, its capital goods businesses, such as industrial plant technology, continued to perform well.

The rise in bottom-line earnings was due in large part to the sale of its U.S. iron foundry Waupaca.

"The weak economic situation and in particular the general uncertainty resulting from the unresolved sovereign debt crisis are increasingly impacting our markets," said chief executive Heinrich Hiesinger.

Nevertheless, looking ahead, ThyssenKrupp said it was penciling in full-year operating profit "in the mid three-digit million euro range," or around 500 million euros.

In the 12 months to September 2011, the group had booked an operating loss of 751 million euros and an after-tax loss of 1.78 billion euros owing largely to huge cost overruns on the construction of a plant in Brazil. ThyssenKrupp said Friday it was "examining all strategic options in all directions" for the two steel plants in the U.S. and in Brazil.

The group later announced that it had signed a deal to sell its insulated building panels business ThyssenKrupp Construction -- which represent annual sales of 315 million euros and a workforce of 780 -- to the Irish Kingspan group.

Copyright Agence France-Presse, 2012

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