STINNES GROUP SEES SLOWED GROWTH

STINNES GROUP SEES SLOWED GROWTH

   Stinnes Group, whose holdings include the logistics subsidiary Schenker, said its first quarter earnings mirrored last year, despite losses suffered in its materials division.

   The group's external sales decreased 8.4 percent to euro 2.9 billion ($2.6 billion), due to the sluggish economy and falling prices, the company said. The materials division sales decline 29.1 percent to euro 293 million ($267.4 million).

   Internal operating profit increased 2.0 percent to euro 57.8 million ($52.8 million). Stinnes' fist-quarter stock price climbed more than 20 percent to euro 27.30 ($24.92), which resulted in the group's earnings before interest and taxes and operating profit including a charge of euro 4.9 million ($4.5 million), which had to be transferred to provision for virtual stock options of the group's managers. Stinnes' EBIT and internal operating profit had been boosted by euro 2.8 million in the previous year.

   The transportation division's operating profit grew 9.2 percent to euro 31.3 million ($28.6 million), and the chemical division's operating profit went up 13.2 percent to euro 30.5 million ($27.8 million). The materials division saw operating profit tumble 74.6 percent to euro 2.1 million ($1.9 million). With the reorganization of its steel companies, which began in fiscal 2001, and an extensive cost-cutting program, Stinnes said it has already adopted drastic measures in response to the development in the steel market.

   'Stinnes did much better than we had expected,' said Wulf Bernotat, chief executive officer of Stinnes AG. 'If Stinnes is capable of increasing 5the internal operating profit even during a slack period, we should be able to benefit from the expected economic recovery.