DUISBURG (dpa-AFX) - Shares of German steel giant ThyssenKrupp AG (TYEKF.PK) and its domestic rival Salzgitter AG (SZGPF, SZGPY) were gaining in the early morning trading in Germany after the companies reported significant improvement in its quarterly earnings.
ThyssenKrupp's third-quarter profit surged with higher sales, and the company continues to expect higher earnings in fiscal 2015. Salzgitter turned to a net profit in its second-quarter, despite weak sales. Both the companies also backed their full-year forecast.
For the third quarter, ThyssenKrupp's profit attributable to stockholders was 199 million euros, sharply higher than 40 million euros last year. Earnings per share soared to 0.35 euros from last year's 0.07 euros.
Earnings before interest and tax or EBIT climbed 43 percent to 494 million euros, and EBIT margin improved to 4.4 percent from 3.2 percent. Adjusted EBIT grew 37 percent to 539 million euros, the highest level for 15 quarters, the company noted. Adjusted EBIT margin also improved.
EBITDA, a key earnings metric, grew 24 percent year-on-year to 796 million euros as all business areas except Steel Americas made a positive contribution.
Net sales for the quarter grew 4 percent on a reported basis to 11.18 billion euros, but declined 2 percent on a comparable basis mainly due to lower material prices at Materials Services and lower raw material prices at steel operations.
Looking ahead, for fiscal 2015, ThyssenKrupp continues to expect a significant year-on-year improvement in net income from last year's 195 million euros. Further, the company still expects adjusted EBIT to be 1.6 billion euros to 1.7 billion euros, compared to last year's adjusted EBIT of 1.3 billion euros.
ThyssenKrupp's sales are expected to grow by a mid-single-digit percentage rate from the prior year's 41.2 billion euros. On a comparable basis, Group sales will be roughly level with the prior year. Previously, the company had expected comparable sales to grow year-on-year by a single-digit percentage rate.
For Salzgitter, net income for the second quarter was 8.6 million euros, compared to a net loss of 2.6 million euros in the prior-year quarter. Earnings per share were 0.14 euros, compared to loss per share of 0.07 euros last year.
Pre-tax profit climbed 23.9 percent to 28.4 million euros from 4.5 million euros last year, as all business units contributed to this development.
External sales declined 6.6 percent year-on-year to 2.241 billion euros. Sharp declines in Strip Steel, Plate / Section Steel, and Energy business units were partly offset by improvement in trading and technology business units. Crude steel production declined to 1.74 million tonnes from 1.82 million tonnes a year ago.
Looking ahead to fiscal 2015, Salzgitter continues to expect pre-tax profit in the lower to mid-double-digit million euro range on projected stable sales. The Strip Steel Business Unit expects a clearly negative result for the third quarter.
In Germany, ThyssenKrupp shares were gaining around 4.6 percent in the early morning trading at 23.28 euros. Salzgitter shares were gaining 2.5 percent to 31.67 euros.
Copyright RTT News/dpa-AFX