Voestalpine AG, Austria's biggest steelmaker, plans to raise its dividend by 13 percent after fiscal full-year profit advanced. The company proposed to increase the payout by 10 cents to 90 cents a share. Net income rose by a third to 444.9 million euros ($582 million) in the year through March. Voestalpine benefits from a focus on high-quality specialized steel sold on long-term contracts to customers in the transport, consumer-products and energy industries. Its profit a year earlier was hurt by provisions for an antitrust fine following a German probe into the railway-steel market.
Considering the economic environment and in comparison to other companies in the industry, the performance of Voestalpine in the past business year was very satisfactory, Chief Executive Officer Wolfgang Eder said in the statement. Voestalpine climbed as much as 5.5 percent in Vienna trading, the biggest increase in nine months and the most among companies on the Bloomberg Europe Steel Index. Free cash flow rose to more than 500 million euros in the year, allowing Voestalpine to reduce net debt to 2.26 billion euros, or 45 percent of equity, while raising the dividend.
The payout must be approved at the annual general meeting on July 3. The company is expanding capacity in the U.S. with a 550 million-euro iron-ore pellet factory in Texas. Back home in Europe, Voestalpine has scaled back its forecast for a recovery, saying in April that budget cuts were weighing on demand.