Thyssen, Air Liquide expect recovery

February 26, 2002 Posted: 0927 GMT

LONDON (CNN) -- Some of Europe's biggest industrial companies held out a ray of hope for a global recovery in the second half of 2002 as they posted earnings in line with market expectations.

ThyssenKrupp (FTKA), Europe's fourth-biggest steel maker, said on Tuesday first-quarter pretax profit slumped 93 percent to 28 million, down from 414 million in the previous quarter.

"With the economic slowdown likely to continue for the time being, the situation is expected to remain difficult in the subsequent quarters... we do not expect a recovery in the world economic growth before the second-half of 2002," ThyssenKrupp said.

Steel companies have been hit hard by overcapacity, cheaper imports and sliding demand for car parts in the U.S., the world's biggest economy.

The decline for demand for new vehicles damaged earnings at French tyremaker  Michelin, the world' second-biggest, which said 2001 net income dived almost 26 percent.

Michelin, which has shed about 7,500 jobs in Europe over the last three years and is cutting another 2,000 posts in North America in a bid to trim costs by $200 million a year, said net income slid to 296 million.

Like its peers, Michelin has slashed jobs and closed plants as rising raw material expenses, a slowdown in U.S. growth and a decline in the North American truck market threatened profitability.

And Air Liquide, the world's biggest supplier of industrial and medical gasses, said on Tuesday 2002 net profit rose 7.7 percent to 701.9 million.

The French industrial giant was able to counter a global economic slowdown by reorganising its businesses to cut costs. Sales of its products, many of which are used in the manufacturing of electronics goods, have been hurt by a drop in consumer demand as the global economy stalled.

Air Liquide's stock slipped half a percent to 159.90, while Michelin climbed 2.4 percent to 40.85 in early Paris trading on Thursday. ThyssenKrupp dipped 1.5 percent to 16.60 in Frankfurt.