Germany’s biggest steelmaker ThyssenKrupp is resuming dividend payments a year earlier than expected, signalling confidence in a turnaround with the promise of a modest payout for shareholders after it beat profit forecasts. ThyssenKrupp said yesterday it would pay €0.11 ($0.14) a share for the year to end-September. “It is a signal to our shareholders that we have reached a turning point in our earnings development,” Chief Executive Heinrich Hiesinger said. ThyssenKrupp shares rose more than 3% before settling back to trade 1.6% higher at €20.04 by 1243 GMT, and were the top gainers in a 0.7%-lower German DAX.

“They came out with a quite small 11 cents per share announcement, but it’s symbolic of the company’s transformation after it was pushed into a distressed asset sale and a capital increase a year ago,” said analyst Seth Rosenfeld of Jefferies.

Hiesinger took over in 2011, inheriting a company that had spent 12bn euros on expanding its steel businesses in Brazil and Alabama, only to be hit by a global economic crisis that choked steel demand, and a strengthening of Brazil’s real.

He began to turn ThyssenKrupp away from its steelmaking roots towards higher-margin businesses like high-tech elevators, but was still forced into a fire sale of the Alabama plant and an emergency rights issue last year to keep creditors at bay.

ThyssenKrupp reported yesterday its first net profit in four years, as all its units reported improvements except for logistics, which was depressed by two loss-making units the company wants to sell.

Underlying operating profit more than doubled to €1.33bnin the year to end-September, and the company said that should rise to at least 1.5bn this year, although it would need to make 2bn before it could raise its dividend.

 

Johnson Matthey

The London-listed Johnson Matthey, which also refines and recycles platinum group metals, reported an underlying pretax profit of £216.4mn ($338.6mn) for the half year to the end of September, up 2% from last year and ahead of a company-provided analyst consensus of £206.7mn.

Although the largest chunk of the company’s revenue comes from autocatalysts currently, Johnson Matthey is looking to grow other areas such as batteries technology.

Johnson Matthey expects higher earnings this year after the specialty chemicals company increased first-half profits due to stronger sales of its products that help to make cars more environmentally friendly.

The company said tighter environmental legislation was mainly responsible for boosting sales in Europe and Asia of its auto catalysts, which control car emissions. Growth in car production and truck sales also helped.

“Our growth is going to be driven by car production growth in certain areas such as Asia and North America,” finance director Den Jones said. “And our customers in Europe are doing better than others so we are benefiting from that,” he said. “Truck sales in North America are also doing well.”

Johnson Matthey, the world’s largest auto catalyst maker, said it expected its performance in the current financial year would be slightly ahead of last year.

 

Babcock

British engineering firm Babcock said yesterday strong demand for niche services helped core earnings growth improve to 9% in the first half of the year, after posting a 32% jump in pretax profits.

Chief Executive Peter Rogers said in July the company, which generates 81% of its business in Britain and whose largest customer is the Ministry of Defence, was aiming for 10% core earnings growth in the coming years.

Rogers, who has been in the role for 11 years, told Reuters core, or organic, earnings growth in the first half had risen from the 6-8% seen in recent years.

“We have found a niche in the market, which is very robust,” he said. The defence, support services and engineering contractor has profited over the past year as military and engineering clients, under pressure from tighter government budgets, have outsourced work to cut costs.

Babcock repairs and maintains Britain’s submarines and on Wednesday said it was the preferred bidder for the sale of the Ministry of Defence’s business that repairs and maintains equipment for land forces.

The 123-year-old company reaffirmed its full-year profit forecast after underlying pretax profit for the six months to September 30 jumped to £187mn ($292.5mn) from £141.7mn.

Shares in the company were up 4.6% at 11 pence by GMT, making it the biggest gainer on the FTSE 100 index.

 

Telekom Slovenia

Telekom Slovenia, due to be privatised next year, reported a 19% drop in nine-month group net profit, partly due to price cuts for its products, the company said yesterday.

Slovenia’s leading telecom operator had net profit of €37.7mn ($47.3mn), while revenues fell to €579.3mn from €599.1mn a year ago.

The company said the profit had shrunk due to lower cost of its products for customers which was part of plans to improve Telekom’s competitiveness and retain its market share.

Telekom controls 48.7% in the mobile telephony market in Slovenia, down 0.8% on a year ago, and 35.6% in fixed telephony, which is 2.5 lower than last year. “The results are likely to push the share price down in the short term but in the medium term the price is probably going to rise because the company is expected to be sold at some 10 to 20% above its current market value,” Iztok Trobec at Dezelna Banka, said.

Telekom Slovenia is the most prized of the 15 companies the government put up for sale last year, with a market value of about €1bn.

 

Mothercare

Baby goods retailer Mothercare posted a small rise in first-half profit and said lower losses and improving sales in the United Kingdom provided early encouragement for its new turnaround plan.

While Mothercare’s overseas business is profitable, fierce competition from supermarkets such as Tesco and Internet retailers like Amazon has hit it hard at home.

This has left the company with too many stores and not enough customers, and exposed a need to boost its online business and improve product ranges and brands.

In September, new boss Mark Newton-Jones tapped investors for £100mn ($157mn) to fund more UK store closures and revamp others with video walls and iPads, with the aim of erasing losses by 2017 at a division which accounts for 60% of sales.

The firm is also pushing more full-price sales rather than discounts and has said most of its UK stores, which will be cut to 160 from 220 over the next three years, will switch to larger out-of-town formats that house more items and services.

Yesterday, the company said losses at its UK division narrowed slightly to £13.5mn in the first 28 weeks to October 11, while overall underlying group pretax profit rose to £3.3mn from £2mn a year ago.

Sales at UK stores open more than a year rose 1.5%, with fewer promotions helping keep gross margins flat after five years of decline. Its franchised international arm, which has 1,300 stores in 60 countries, saw underlying sales rise 4.9% with year-on-year profit flat at £25mn.

 

Salesforce

Cloud software company Salesforce.com forecast revenue for the current quarter and full year 2016 that fell short of market expectations, hurt by a strong dollar.

Shares of Salesforce, which gets about 30% of its revenue from outside Americas, were down 4.5% in extended trading on Wednesday.

Net loss narrowed to $38.9mn, or 6 cents per share, from $124.4mn, or 21 cents per share, a year earlier.

On an adjusted basis, the company earned 14 cents per share. The world’s biggest maker of online sales software said it expected revenue of $6.45bn to $6.5bn for the year ending January 2016, missing analysts’ average estimate of $6.66bn.

“Now keep in mind we are 15 months away from the end of fiscal 2016 and this is our initial guidance without knowing our Q4 results,” Chief Executive Marc Benioff said on a post-earnings call.

The company forecast revenue of about $1.44bn for the quarter ending January 31, below the average analyst estimate of $1.45bn.

Revenue rose 28.6% to $1.38bn for the third quarter ended October 31, above analysts’ expectations, helped by higher demand for its web-based sales and marketing software and services.

 

Keurig

Keurig Green Mountain forecast first-quarter profit below analysts’ estimates as the company battles increasing competition from coffee pod makers and rising coffee prices.

The company’s shares fell 1.2% in after-market trading on Wednesday. Keurig Green Mountain has tried to expand beyond its core business of single-serve coffee packets, as it grapples with competition from smaller rivals such as TreeHouse Foods. Unfavourable weather patterns in South America had pushed prices of Arabica coffee to record highs this year.

The company forecast first-quarter 2015 earnings between 83-88 cents per share, below the average analyst estimate of 96 cents.

Keurig Green Mountain reported better-than-expected revenue and profit for the fourth quarter, helped by higher sales of coffee portion packs, its largest business.

Total portion pack net sales increased 22% in the quarter ended Sept. 27, the company said.

Net income attributable to Keurig rose to $141.1mn, or 86 cents per share, in its fiscal fourth quarter ended September 27 from $127mn, or 83 cents per share, a year earlier.

 

VTB

Russia’s second-largest bank VTB expects a tough end to the year after posting a 98% slide in third-quarter profit because of higher provisions for bad loans, an economic slowdown and losses over Ukraine.

The state-controlled bank, which was sanctioned by the US and European Union over Moscow’s role in the Ukraine conflict, is a key lender to Russia’s economy, which has slowed sharply this year and is on the verge of recession.

“We don’t expect a significant profit (for the full year),” Herbert Moos, VTB’s chief financial officer, told journalists. “All that profit will go on forming additional provisions.”

VTB’s third-quarter net profit was 0.4bn roubles ($8.58mn), compared to 18.4bn roubles a year earlier, short of analysts’ expectations of 3bn roubles.

The bank said loan-loss provisions in the third quarter rose to 65bn roubles from 22bn a year earlier, while its cost of risk rose to 2.9% in the first nine months from 1.7% a year earlier.

“We see a continuing deterioration of the situation in Ukraine, we see additional provisions for our retail portfolio, and we see provisions linked with construction firms,” Moos said.