FRANKFURT: German industrial giant ThyssenKrupp said 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 in a statement that it booked net profit of 238 million euros ($ 292 million) in the three months to June.
That represented an increase of 16 percent over the year-earlier period.
At the same time, operating profit, as measured by earnings before interest and tax (EBIT), plummeted by 79 percent to 122 million euros, sales slipped by 7.0 percent 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 US iron foundry Waupaca, ThyssenKrupp explained.
“The weak economic situation and in particular the general uncertainty resulting from the unresolved sovereign debt crisis are increasingly impacting our markets” meanwhile, said chief executive Heinrich Hiesinger.
Nevertheless, looking ahead, ThyssenKrupp said it was pencilling in full-year operating profit “in the mid three-digit million euro range,” or around 500 million euros.
The outlook cheered investors and ThyssenKrupp shares were the biggest gainer on the Frankfurt stock exchange, soaring 4.25 percent to 16.31 euros in a slightly softer market.
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 it was “examining all strategic options in all directions” for the two steel plants in the US 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.
In a separate statement, Kingspan, a supplier of insulation and building envelope systems, put the purchase price at 65 million euros, including 50 million euros in cash and 15 million euros in pension liabilities.
The agreement was still subject to local regulatory approval, both companies said.
