ThyssenKrupp raises full-year forecast

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ThyssenKrupp raised its forecast for full-year net income on Thursday after China?s voracious appetite for steel helped boost third-quarter profits.

The German industrial group on Thursday revealed net income had more than doubled to ?488m ($598m) in the three months to June 30, compared to the previous year.

The group raised its guidance for full-year net income from about ?1bn to ?as close as possible to our medium-target of ?1.5bn?.

ThyssenKrupp said strong expansion in Asia had been ?mainly the result of the tumultuous growth in China?. It also said the growth of the US economy had continued unabated.

Steel orders increased 30 per cent to ?3.7bn in the quarter.

But the company added that ?the risk of overheating of the China economy has prompted a more restrictive economic policy recently.?

It expected that tighter monetary policies could cool the rate of expansion.

Costs of raw materials, freight rates and steel products soared to all-time highs and forced the group to introduce further price increases.

The sharp increase in demand also led to supply bottlenecks and meant the group was unable to meet customers? demand in full. It said imports to the Western European steel market had edged up recently but still fell well short of the previous year.

The group?s automotive business overcame difficult market conditions to report a 26 per cent growth in sales to ?1.9bn but growth was expected to remain subdued in the remainder of the year.

ThyssenKrupp?s services business also benefited from a significant increase in demand for materials in Eastern Europe.

Total sales in the quarter rose 21 per cent to ?10.66bn despite the negative impact of the strong euro. Earnings per share were 55 cents, compared to 42 cents in 2003.

The shares rose 3.6 per cent to ?14.60 in early morning trade.

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