Services surprised positively due to rising steel prices and windfall gains

Germany's largest steel-maker now expects full-year pretax afterone-off effects to reach more than 3.2 billion euros, versusprevious guidance for a figure exceeding 3 billion euros.
Pretax profit after one-off effects in the quarter ended June 30fell to 909 million euros from 1.219 billion but clearly beatexpectations of 808 million euros. One-off effects were mainly the restructuring costs at the metalforming operations of ThyssenKrupp's steel division, as well aslaunch costs for new plants in the United States and Brazil.
'Services surprised positively due to rising steel prices andwindfall gains. Technologies also came in at the top-end ofexpectations,' Dirk Nettling, analyst at Commerzbank said. Strong global demand for plant construction helped profits atThyssenKrupp's technologies division, while services posted a 13percent increase in pretax profit to 248 million euros, as itssteel trading operations, unlike the steel division, were able tobenefit from rising steel prices.
In ThyssenKrupp's stainless steel division, pretax profit fell to93 million euros from 296 million a year earlier, mainly due tolower nickel prices.
Its steel division posted pretax profit of 389 million, down 9percent, as the steel-maker could not pass higher raw materialcosts on to customers due to the high share of annual ormulti-annual contracts in its steel pricing contract mix.
Even though the company remained vague on the extent to which ithas been able to re-negotiate steel prices on existing forwardcontracts, only saying its steel division will not be able to passon to customers the sharp rise in raw material costs, analysts saidthird-quarter earnings shed light on ThyssenKrupp's bargainingclout.
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