German industrial giant Thyssenkrupp confirmed its full-year outlook yesterday after dramatically swinging back to profit in the second quarter as it reaped the benefits of a major overhaul of its steel operations.
The group reported net profit of 253 million euros ($300 million) between January and March, the second quarter of its financial year, compared with an 870 million euro loss over the same period last year. Last year's loss was mainly down to one-off charges related to the sale of Thyssenkrupp's Brazilian steel mill CSA, which allowed the group to finally end its Steel Americas foray after years of losses.
The sale was part of Thyssenkrupp's wider strategy to shift away from its traditional steel business -- an industry battered by cheap Chinese competition - and focus on its more lucrative operations of making industrial goods such as elevators, submarines and car parts.
Thyssenkrupp said second-quarter earnings were also boosted by a recovery in global steel prices, which helped operating or underlying profit adjusted for special items climb 21 percent to 500 million euros.
Revenues meanwhile slipped two percent to 10.75 billion euros, which was still better than analysts surveyed by Factset had expected. New orders meanwhile fell by 12 percent.
The Essen-based group hailed a "strong" second quarter "despite adverse currency effects and higher material costs in the capital goods businesses."
It said the planned merger of its European steelmaking arm with India's Tata was on track, a move that will create the second-largest producer on the continent after ArcelorMittal.
"Thyssenkrupp expects that a decision can be made by the boards (of both companies) in the first half of 2018," it said. Looking ahead to the full year, Thyssenkrupp said it continued to expect adjusted operating profits of between 1.8 and 2.0 billion euros, as well as a "significant increase in net income" compared with last year's 271 million euros.