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Sat, Nov 29, 2008 - Page 10 News List

ThyssenKrupp profits drop as prices decline

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ThyssenKrupp AG, Germany’s largest steelmaker, said full-year profit declined 6 percent after building costs overran at its Brazilian plant and stainless steel prices dropped.

Pretax profit fell to 3.13 billion euros (US$4.04 billion) in the year ended Sept. 30, from 3.33 billion euros a year earlier, the Dusseldorf-based company said yesterday in a statement.

It forecast a “significant” decline in sales for the current business year because of a weaker economy, adding that a detailed outlook can’t currently be made.

Steel prices advanced to a record in September, only to plunge in the fourth quarter of the calendar year as global economic growth slowed. ThyssenKrupp has said it will cut output by closing plants and reducing the number of work shifts.

Sales advanced to 53.4 billion euros from 51.7 billion euros. The company said it plans to pay a dividend of 1.30 euros a share, unchanged from a year earlier.

ThyssenKrupp said full-year earnings before tax and one-time items, such as the Brazilian plant costs and other charges, totaled 3.5 billion euros, beating its own forecast for profit of more than 3.2 billion euros.

Larger rival ArcelorMittal is also slashing output by more than 30 percent and may cut as many as 9,000 jobs, or 3 percent of its global workforce, the world’s largest steelmaker said on Thursday in an e-mailed statement.

“The global economic reality means that it is only sensible to adopt such measures” as cutting jobs, executive vice president Bernard Fontana said in the statement.

In China, Baosteel Group Corp (寶鋼集團) said China’s biggest steelmaker is facing its “most difficult” period since its founding 30 years ago as global economies grapple with a slowdown and credit crisis.

Baosteel’s output, sales and profit has plunged, and the company should cut capital expenditure, general manager He Wenbo (何文波) said in the Shanghai-based company’s regular newsletter.

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