FRANKFURT -- German steel and engineering group ThyssenKrupp said Friday that a pretax profit in the quarter to December rose about 6 percent as economic recovery set in, and it stuck to its forecast for the full year.
The world's largest stainless steel producer said in a statement before its annual general meeting that pretax profit in the first quarter of its 2003/04 business year rose to about $191 million from 141 million a year ago.
"As the economic recovery sets in, we have been observing a better-than-expected revival in business for some weeks now, and this continued in the seasonally weak month of December," Chief Executive Ekkehard Schulz said in a statement.
The company said it expected the main impetus from an upturn in the global economy to come in the second half of this year.
Schulz said Thyssen was still aiming for a pretax profit in its current year to the end of September 2004 of close to 1 billion euros, but said it could exceed that level if currency and raw materials markets remained stable.
Thyssen -- which makes car parts, elevators and some of the world's fastest cruise liners -- last month cut its profit target to $1.2 billion from $1.9 billion, blaming uncertainty about the speed of an economic upturn.
The group has said it will increase flat carbon steel prices by $2.5 per ton this year in a bid to counter the rising cost of obtaining ore and blast furnace coke and higher sea freight rates.
Major iron ore producers BHP Billiton and Rio Tinto said earlier this month they had won an agreement with Japan's Nippon Steel Corp. to increase their fine iron ore prices by 19 percent from April.
Thyssen is in the middle of a major overhaul that includes the sale of 33 noncore units over the next few years as well as strategic acquisitions aimed at lifting revenues by around a quarter.
It said its focus on steel, capital goods and services, as well as continued cost cuts, would help improve profits.
The group said last month it had completed disposals of businesses with combined sales of around $1.2 billion since October 2002 and had bought businesses with total revenues of $1.9 billion.
Thyssen said sales in the its first three months were flat at $11 billion, while its order intake rose to 9.6 billion from 9.0 billion a year ago.