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ThyssenKrupp, the German group selling out of steelmaking to focus on capital goods, posted better than expected earnings for its full year, sending shares higher.

Adjusted earnings before interest and taxes, the main measure watched by analysts, rose 30 per cent to €1.91bn over 12 months, outpacing forecasts of €1.73bn.

The company’s shares rose 4 per cent in Thursday afternoon trading, erasing losses for the year. Shares have struggled in 2017 as ThyssenKrupp has tried to manage a major restructuring in the face of staunch opposition from labour unions.

ThyssenKrupp, formed by the merger of Thyssen AG and Krupp in 1999, has roots in the steel industry extending more than 200 years ago to 1811, when Krupp started as a cast steel factory. 

But since former Siemens executive Heinrich Hiesinger took control in 2011, it has undergone a transition to concentrate on producing higher margin, technological goods such as elevators, submarines and car components.

Mr Hiesinger said on Thursday the group had achieved “important milestones” in “a year of important decisions”.

In February the group sold its Brazilian steel plant CSA for about €1.5bn. Following the 2013 decision to sell its US steel mill for $1.55bn, this brought its Steel Americas business to an end.

The group is now in the early stages of spinning off its European steel unit by merging it with the European operations of India’s Tata Steel. The aim is to address overcapacity issues in the European steel market, which has been hit by cheap imports from China. But labour groups have stood firmly opposed, demanding better protections and fewer cuts.

“We cannot avoid this, let’s be honest — we may have to cut thousands of jobs in administration,” Mr Hiesinger said at a press conference in Essen, its headquarters. “But that means several tens of thousands have a more stable future.”

ThyssenKrupp said that adjusted ebit of continuing operations of €1.72bn in 2017 would see a “significant increase” to between €1.8bn to €2bn next year.

RBC Capital Markets noted the outlook was 5 per cent lower than expectations, likely reflecting a cautious view on its Steel Europe unit.

Guido Kerkhoff, chief financial officer, acknowledged the company was being cautious given the uncertainty over where steel prices will be.

“People in the steel sector are either very bullish or very bearish,” he told the Financial Times. “What we always try to find is a way that reflects the volatility. Currently everybody in steel is very up and very bullish. If that continues, [results will be] very positive.”

The annual results showed that order intake grew 18 per cent to €44.3bn, its best performance since 2011.

The group’s materials services unit more than doubled earnings to €312m, thanks to a recovery in material prices. Earnings at its components technology unit rose 12 per cent to €377m, while earnings at its elevator technology division grew 7 per cent to €922m. By contrast, its industrial solutions unit reported a 69 per cent drop in earnings to €111m.

On a net basis, the group still posted a loss of €591m, reflecting a €900m loss from the sale of CSA. Without the sale, Mr Kerkhoff said net profit would have been €321m, up from €261m a year earlier. “We were up 23 per cent from the previous year,” he added.

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