Voestalpine 2Q Profit Rises Despite Fall in Sales

VIENNA--Austrian specialty-steel company Voestalpine AG's (VOE.VI) profit in the second quarter of the year ending March 2015 increased, despite a drop in sales, partly due to positive one-off effects and lower financing costs, the company said Wednesday.

Voestalpine said net profit in the quarter that ended Sept. 30, 2014, increased sharply to 195.1 million euros ($244.23 million) from EUR55.1 million in the corresponding period a year earlier. Revenue was down 0.7% to EUR2.73 billion from EUR2.75 billion.

The company's results beat analysts' expectations. In a poll conducted by Dow Jones Newswires, eight analysts had expected the steel company to post a net profit of EUR115 million and revenue of EUR2.67 billion.

Voestalpine said "portfolio optimization measures' allowed it to increase earnings before interest and taxes by EUR51.6 million on the year to EUR226.3 million.

It said economic development was strong in North America and China, but it doesn't see much prospect for Brazil and Russia to return to growth in the near future.

In October, Voestalpine called in a hybrid bond, which while helping to decrease financing costs, did increase the company's gearing ratio to 58.8% from 46.0% at the end of March, it said.

Voestalpine's steel division, which specializes in high-quality steel and is mostly active in Europe, profited from high demand from the automotive sectors and a recovery in the oil and gas industry's pipeline business, it said.

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