ThyssenKrupp rose 5.1 percent to 16.45 euros by the close, the biggest jump since Dec. 20 and was the biggest gainer on the German benchmark DAX index. Adjusted earnings before interest and taxes, used by ThyssenKrupp to forecast future results, fell 79 percent to 122 million euros ($150 million) in the fiscal third-quarter as losses from the Steel Americas unit widened.
The result beat the 83.4 million-euro average of 12 analyst estimates Bloomberg compiled. ThyssenKrupp affirmed its forecast for adjusted Ebit “in the mid three-digit million euro range.”
“Earnings were not as bad as feared,” said Marc Gabriel, a Bankhaus Lampe KG analyst. “The company signaled that it’s progressing with the sale of its problem child Steel Americas.”
Interested parties in Steel Americas are in double digits, Chief Financial Officer Guido Kerkhoff said today on a call.
Europe’s steel companies have seen margins squeezed as the region’s economic woes curb demand from the car, appliance and building industries, weighing on prices. Austria’s Voestalpine AG (VOE) reported a 34 percent decline in net income on Aug. 7, and ArcelorMittal (MT) posted a 28 percent drop in earnings last month.
“Our capital goods businesses all delivered a pleasingly robust performance,” Chief Executive Officer Heinrich Hiesinger said in a statement. “Nevertheless, we are noticing the high level of caution among our customers.” The company isn’t satisfied with its Elevator Technology operation, he said on the call. The unit will cut 500 posts, mostly in southern Europe.
ThyssenKrupp said it had agreed to sell its European steel construction group to Kingspan Group Plc. Kingspan will pay about 65 million euros for the unit, the Cavan, Ireland-based company said today in a separate statement. ThyssenKrupp reduced net debt to 5.8 billion euros from 6.25 billion euros a year earlier, the Essen, Germany-based company said in the statement.
“At first sight it is positive that net financial debt narrowed,” Hans-Peter Wodniok, an analyst at Fairesearch, said from Kronberg near Frankfurt. “Debt is still much too high.”
The adjusted Ebit loss at Steel Americas widened to 262 million euros from 190 million euros.
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