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ECONOMY

Steel demand slumps, ThyssenKrupp suffers

German heavy industry giant ThyssenKrupp said Tuesday it is forecasting sluggish sales and earnings this year as it continues to suffer from weak steel demand in Europe.

Steel demand slumps, ThyssenKrupp suffers
Photo: DPA

“Our business performance in the 2012/2013 fiscal year will be characterised to a very large extent by the continued absence of a global economic recovery, with an unsolved debt crisis in particular in the eurozone and slower growth in the emerging economies,” ThyssenKrupp said in a statement.

The group said it expected sales “to remain at the prior-year level of around €40 billion, provided there are no major dislocations on the raw materials markets.”

And underlying profit, as measured by earnings before interest and tax (EBIT), “should be around €1.0 billion … assuming that the slower activity on the materials markets at the beginning of the new fiscal year compared with the prior year continues but does not progressively worsen,” it said.

ThyssenKrupp, which runs it business year from October to September, booked EBIT of €1.4 billion in the year ended September 30, 2012.

In the first quarter of the current business year, the three months to December, ThyssenKrupp turned in net profit of €35 million, compared with a loss of €460 million a year earlier.

But net profit from continuing operations fell by 29 percent to €29 million.

First-quarter EBIT fell by 14 percent to €219 million on stagnant orders of €9.642 billion and an 8.0 percent drop in sales to €8.837 billion.

“We cannot be satisfied with the group’s current earning power,” complained chief executive Heinrich Hiesinger. The steel division in particular was being hit by falling demand and downward pressure on prices.

Alongside steel, ThyssenKrupp also makes elevators, industrial plant technology, submarines and car parts, most of which reported stronger business in the first quarter.

Last week, ThyssenKrupp unveiled plans to axe more than seven percent of the workforce at its Steel Europe division to make the business more competitive.

ThyssenKrupp said it would axe “more than 2,000 jobs” out a total workforce of 27,600 at its Steel Europe division in a €500 million cost-cutting drive.

AFP/jcw

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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