March 1, 2017 / 10:07 AM / 3 years ago

Steel distributor Kloeckner resumes dividend after strong 2016

FRANKFURT (Reuters) - Kloeckner & Co (KCOGn.DE) reported its highest annual profit in five years on Wednesday, allowing the German steel distributor to resume and raise its dividend and sending its shares up by almost four percent.

Earnings before interest, tax, depreciation and amortisation more than doubled to 196 million euros ($207 million), it said, and announced plans to pay a dividend of 0.20 euros per share.

Analysts had expected Kloeckner, which suspended dividend payments last year, to offer a payout this time of 0.16 euros.

“Given that no dividend was paid out in the prior year and in view of the improved operating environment, the management board and supervisory board consider it appropriate to distribute a dividend in excess of this amount for 2016,” Kloeckner said.

Its 2016 sales fell 11 percent to 5.73 billion euros, broadly in line with expectations.

Kloeckner said it expected a slight rise in EBITDA this year, hitting 65 to 75 million euros this quarter.

The company said it expected “very substantial growth” this quarter due to higher steel prices at the start of the year, and said revenue in 2017 was expected to rise due to higher demand and prices.

European steel prices have risen this year helped by economic recovery and anti-dumping tariffs that have discouraged cheap imports from countries like China, Russia and Turkey, but steelmakers have already begun to increase supply in response.

Kloeckner’s primary sales markets are Europe and the United States.

($1 = 0.9487 euros)

Reporting by Georgina Prodhan; editing by Jason Neely

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