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Income, dividendPre-tax income from continuing operations before non-recurring items reached a new record level of €1.8 billion. The biggest contribution again came from the Steel segment, which accounted for more than half of the Group's profit. We propose that the Annual General Meeting resolve a dividend of €0.70 per share, €0.10 higher than the previous year. In addition, a special dividend of €0.10 per share is to be paid as a result of the virtually completed divestment program. ThyssenKrupp generated income from continuing operations before taxes and minority interest and before non-recurring items of €1,836 million in fiscal 2004/2005; not included in this is a non-recurring charge of €474 million in connection with the reassessment of the 20.6% interest in RAG Aktiengesellschaft, as well as a gain of €870 million from the sale of the Residential Real Estate business reported under discontinued operations. This represents another record profit for ThyssenKrupp, €359 million higher than the Company's previous best in the prior year. The main drivers of this success were the excellent results at Steel. In all segments, the successfully implemented programs to increase efficiency and the completed portfolio adjustments had a positive impact. Increases in starting material and raw material prices and the worsening situation in parts of the auto industry in the USA and the uk had a negative impact on earnings. The divestment program for non-core operations was virtually completed in the course of the fiscal year. Eleven significant entities were either sold or their disposal was initiated in the course of fiscal 2004/2005. In total, these transactions resulted in a disposal gain of €469 million before taxes; the ordinary income of the sold entities totaled €21 million before taxes and is reported under discontinued operations along with the disposal gains/losses. Steel, Services and Technologies generated substantial profit increases, while Automotive in particular reported declining profits. The Steel segment achieved a significant profit increase and contributed more than half of the Group's earnings. Thanks to efficiency gains and high average revenues for nonalloyed steel, Carbon Steel improved its profit significantly by more than 50%. At Stainless Steel, by contrast, declining revenues from the 2nd quarter in conjunction with increased prices for raw materials resulted in lower profits. Due to the dramatic price drop on the Chinese market the Chinese cold rolling mill generated a loss. In the Automotive segment, higher steel prices and low capacity utilization at the North American plants for body parts and frames were the main reasons for a significant decrease in profits. The Technologies segment benefited from increased demand in the general engineering sector. This, in conjunction with the absence of non-recurring charges which impacted the prior-year results, resulted in a significant profit increase. Profits at Elevator again reached a high level but were lower than the prior year as a result of higher starting material prices and increased competition. The Services segment again recorded a significant profit increase at a high level; key factors were strong international demand for industrial and raw materials, the business expansion in Eastern and Central Europe, and cost savings. Industrial Services also profited from strong international demand for its services.
A detailed report on segment earnings is contained in the Management's Discussion and Analysis. Income of ThyssenKrupp AGThe net income of ThyssenKrupp AG in the reporting year according to HGB (German GAAP) amounted to €920 million, compared with €301 million the year before. ThyssenKrupp AG improved its income from investments from €460 million to €1,540 million. The profit transfer from ThyssenKrupp Real Estate GmbH resulted in income of €1,844 million due to the sale of the residential real estate activity. The revaluation of accrued pension liabilities due to the decline in interest rates worked in the opposite direction. In addition to a charge of €38 million at ThyssenKrupp AG, an amount of €531 million was recognized for future pension liabilities of subsidiaries, which reduced income from investments. Other operating income increased as a result of intercompany tax allocations and a €52 million write-up on the carrying value of ThyssenKrupp Steel AG. After deducting expenses for Group management activities, pension costs for former employees of ThyssenKrupp AG and its predecessors, and net interest expense, income from ordinary activities amounted to €1,578 million, compared with €338 million in the previous year. The extraordinary loss results in its full amount of €512 million from the impairment of the investment in RAG Aktiengesellschaft to its carrying value. Despite the still existing loss carryforwards, application of the minimum tax resulted in tax expense of €146 million. Of the resultant net income of €920 million, €481 million was transferred to retained earnings. Included in this is the write-up on the shares of ThyssenKrupp Steel AG in accordance with Art. 58 par. 2a AktG of €43 million net of tax. Including the carryforward from the previous year, the remaining unappropriated net income is €448 million. Subject to the resolution of the Annual General Meeting, an amount of €349 million is to be used to distribute a dividend and an amount of €50 million to distribute a special dividend; an amount of €37 million is to be transferred to retained earnings to strengthen stockholders' equity, and the balance of €12 million is to be carried forward. €0.70 dividend and €0.10 special dividend per shareThe legal basis for the dividend payment is the HGB unappropriated net income of ThyssenKrupp AG in the amount of €448 million (previous year: €309 million). It comprises the HGB net income of ThyssenKrupp AG in the amount of €920 million (previous year: €301 million), less €481 million which has already been transferred to retained earnings by the Management, plus the carryforward from the previous year. The Executive Board and Supervisory Board will propose to the Annual General Meeting the payment of a dividend of €0.70 (previous year: €0.60) per share and a special dividend of €0.10 per share, the transfer of a further €37 million to retained earnings, and the carryforward of the balance of €12 million to new account. Should the number of shares eligible for dividend distribution change before the date of the Annual General Meeting, the proposed dividend distribution will be adjusted accordingly. Therefore, of the €448 million unappropriated net income, a total of €399 million is to be used to pay a dividend on the 499,149,151 shares eligible for dividend payment as of September 30, 2005. The special dividend is a result of the virtually completed divestment program. The financial statements of ThyssenKrupp AG are presented in abbreviated form in the following table:
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