Steelmaker ThyssenKrupp 4Q Profit Jumps 38%, Buts Warns Of Weak Outlook

November 28, 2008 1:24 p.m. EST

Frankfurt, Germany (AHN) - ThyssenKrupp AG said Friday that it's profit was bolstered by rising demand in the fourth quarter, but the company said it will cut costs by over 1 billion euros ($1.3 billion) this fiscal year as automobile and construction sector weakens.

The downturn in the auto, machinery and construction industries will also leave its mark on ThyssenKrupp.

"We therefore face a significant drop in sales in 2008/2009, the extent of which cannot yet be predicted," Executive Board Chairman Dr. Ekkehard Schulz said in a statement on Friday.

"This will have a corresponding effect on earnings. The increasing uncertainty on the financial and real markets makes it impossible to provide a quantifiable forecast at this time."

The Germany steelmaker posted 38 percent rise in net profit in its last fiscal fourth quarter as the income jumped to 726 million euros ($936 million) from 526 million euros a year ago in the same period.

The conglomerate reported that its earnings before interest and taxes soared by 61 percent to 956 million euors ($1.2 billion) for the quarter ended Sept. 30.

Sales of the company also surged by 7.3 percent from a year earlier to 13.78 billion euros ($17.47 billion), and overall order intake increased 14 percent to 13.7 billion euros ($17.37 billion) in the fiscal fourth quarter.

The company's net financial debt amounted to 1.58 billion euros. "With cash and cash equivalents of 2.8 billion euros and unused committed credit facilities of 4.6 billion euros, we are starting the new fiscal year on a very solid financial footing," Schulz said.

The company's shares increased by 0.7 percent in the late trading session in Frankfurt, Germany. The stock of the company has dropped by as much as 59 percent so far this year. The company's market value was at 7.6 billion euros through yesterday.