FRANKFURT: German industrial and technology group Thyssenkrupp on Wednesday said first-quarter operating profit rose by more than a third, boosted by a recovery at its European steel unit, which it tries to merge with Tata Steel's operations in Europe.
First-quarter adjusted earnings before interest and tax (EBIT) came in at 444 million euros ($548 million), beating the 436 million average forecast in a Reuters poll. The company stuck to its full-year outlook for adjusted EBIT of 1.8-2.0 billion.
Profits at its Steel Europe division rose nearly six-fold to 160 million euros, Thyssenkrupp said, citing improved prices that already helped global steel leader ArcelorMittal to post a 53-percent profit rise over the same period.
Most famous for its steel business, which has roots going back more than 200 years, Thyssenkrupp is active in several industrial fields and makes everything from elevators and submarines to car parts and chemical plants.
"We're continuing to make good progress with the transformation of Thyssenkrupp into a strong industrial group," Chief Executive Heinrich Hiesinger, who is trying to increase the group's focus on technology, said.
Elevator Technology, Thyssenkrupp's most profitable business, reported a 3-percent profit rise to 220 million euros, accounting for about half of the group's total. Profits at its struggling Industrial Solutions division fell by 71 percent.
Thyssenkrupp in September struck a landmark deal to combine its European steel business with that of India's Tata Steel, creating Europe's No.2 steel player to tackle overcapacity and reduce exposure to the volatile sector.
Investors, most notably Thyssenkrupp's second-largest shareholder Cevian, have called for a further restructuring of the group, arguing its conglomerate structure is not creating sufficient value.
Thyssenkrupp shares have shed more than 8 percent since the steel joint venture was announcement, compared with a 1-percent decline in the STOXX Europe 600 Industrial Goods and Services index. Rival ArcelorMittal's shares are up by a fifth.
Once approved by the boards and regulators, investors expect a flotation of joint venture as well as a potential sale of Materials Services, Thyssenkrupp's materials distribution and trading division.
"We think the window of opportunity to complete these is currently open, but will not remain open forever," analysts at Credit Suisse wrote last week.