May 8 (Bloomberg) -- Kloeckner & Co SE, the German steel trader part-owned by the Knauf family, swung to profit after 10 straight quarterly losses following a program to cut costs.
First-quarter net income was 3 million euros ($4.2 million), after a loss of 16 million euros a year earlier, the Duisburg-based company said today in a statement. The earnings beat the 2.41 million-euro average of nine analyst estimates compiled by Bloomberg.
Kloeckner has reduced costs by closing or selling sites in France and the U.S. and cutting jobs. It’s among those in the industry that curtailed operations as dwindling demand from the auto and construction sectors in Europe and competition from China dragged down prices and squeezed profit margins. It had forecast an improvement in consumption and earnings this year.
“With the little profit a psychological interesting threshold is exceeded,” said Ingo Schachel, an analyst at Commerzbank AG in Frankfurt, who has a hold recommendation for the shares. “That’s nice to have.”
Kloeckner closed up 7.7 percent at 12.07 euros in Frankfurt, the highest level in more than two years. Volume was more than three times the three-month daily average.
“By successfully completing our restructuring measures, we have regained profitability,” Chief Executive Officer Gisbert Ruehl said in the statement.
European Union demand is estimated to rise 3.1 percent this year and 3 percent in 2015 as the industry recovers from the slump, the World Steel Association said April 9.
Kloeckner’s earnings before interest, taxes, depreciation and amortization rose 55 percent to 45 million euros, while sales decreased 3.3 percent to 1.57 billion euros.
The company projects Ebitda of 50 million euros to 60 million euros in the second quarter and reiterated a forecast that earnings this year will exceed last year’s 150 million euros. Schachel estimated it will reach 195 million euros. Dividend payments should resume next year, Kloeckner said.
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