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Steel restructuring lifts ThyssenKrupp profits

© AFP/File | The elevator test tower of German industrial group ThyssenKrupp climbs high above the town of Rottweil in southern Germany. Although the firm is well-known for making steel, elevators have long been its biggest earner

BERLIN (AFP) - 

German industrial conglomerate ThyssenKrupp confirmed its forecasts for the full year Wednesday, saying a new strategy for its long-struggling steel business was paying off.

The group reported net profits of 78 million euros ($96 million) between October and December, the first quarter of its 2017-18 financial year, almost 10 times as much as the 8.0 million euros booked a year earlier.

A fatter bottom line came as revenues fell 3.0 percent, to 9.8 billion euros, while operating, or underlying profit adjusted for special items grew 35 percent, to 444 million euros.

"We're continuing to make good progress with the transformation of ThyssenKrupp into a strong industrial group," chief executive Heinrich Hiesinger said.

The Essen-based giant's products range from steel to elevators -- long its biggest earner -- to submarines, car parts and industrial plants.

But with global steel prices suffering from a flood of cheap Chinese competition, ThyssenKrupp has decided to move away from the traditional business towards more capital goods and services.

It is merging its European steelmaking arm with India's Tata, a move that will create the second-largest producer on the continent after Arcelor Mittal.

Thanks to a broader recovery in raw materials prices, the steel unit multiplied its operating profit more than five times year-on-year in the first quarter, from 28 million to 160 million euros.

Meanwhile ThyssenKrupp highlighted strong performances from its elevator division in the United States and for its car parts business in western Europe and China.

Looking ahead, the group expects to increase adjusted operating profit to between 1.8 and 2.0 billion euros over the full year, from 1.7 billion in 2016-17, producing a "clearly positive" net profit.

© 2018 AFP