German industrial group ThyssenKrupp raised its dividend for the second straight year on Wednesday after reporting its best results since the company's merger in 1999, but forecast only flat earnings in 2004/05. Red-hot demand for steel helped Thyssen rake in 1.58 billion euros ($2.1 billion) in pre-tax profit in the fiscal year that ended in September, up from 774 million a year ago and better than the 1.48-billion-euro average in a Reuters poll.
Europe's third-largest listed steelmaker by volumes warned it sees further increases in raw material prices, but expects demand for steel to remain stable over the longer term thanks in particular to continued strong economic growth in China.
The company, which played down speculation it might merge with another steelmaker such as Anglo-Dutch rival Corus, forecast higher sales and earnings for the medium term.
"Through organic growth, strategic acquisitions and an even stronger services focus, the aim is to boost ThyssenKrupp's sales in the medium term to 45-50 billion euros," CEO Ekkehard Schulz told a news conference. "The group's performance holds potential for further improvement in earnings."
But the stock fell more than 1 percent on what dealers called disappointment over the near-term outlook and the moderate dividend increase. The stock traded at 16 euros by 1130 GMT, down 1.2 percent in a firmer overall market.
Thyssen said it would aim to match pre-tax results in the current fiscal year and proposed raising its dividend payout back up to 0.60 euro per share from 0.50 euro.
The Reuters consensus for the dividend was 0.62 euro.
Sales increased 11 percent to 39.3 billion euros, while new orders rose 17 percent to 41 billion. Net debt plunged to 2.8 billion euros from 4.2 billion in the year earlier.
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