FRANKFURT -- German industrial gas and engineering group Linde AG said on Thursday core earnings would improve this year as it slashes costs and cuts jobs, and it would spin off its ailing refrigeration business.
"We expect to see a noticeable improvement in earnings before interest, tax and amortization (EBITA), assuming the Iraq war does not cause any lasting deterioration in the world economy and Germany does not enter a recession," Linde Chief Executive Wolfgang Reitzle told a news conference.
The group's order intake rose 4.7 percent to 1.4 billion euros ($1.50 billion) in the first two months of the year, due exclusively to plant construction orders, although sales dipped slightly to 1.2 billion euros.
The group posted a 15 percent drop in 2002 core earnings to 647 million euros last month, below market forecasts, as its economically sensitive forklift trucks and refrigeration businesses took the shine off a stronger performance at the industrial gas unit.
Reitzle said the group would spin off the refrigeration unit, which has suffered as retailers cut back on spending, by the end of the year. It would keep its options open on whether to sell the business.
Reitzle also said restructuring at the group's material handling unit, which makes forklift trucks and accounts for around a third of group sales, was ahead of schedule.
Annual cost savings would be beyond the planned 100 million euros by 2005 or 2006, and it would cut more jobs than the 1,000 it previously announced.