Germany’s biggest steelmaker ThyssenKrupp is resuming dividend payments a year earlier than expected, signalling confidence in a turnaround with the promise of a modest payout for shareholders after it beat profit forecasts.

ThyssenKrupp said it would pay 11 cent a share for the year to end-September. "It is a signal to our shareholders that we have reached a turning point in our earnings development," chief executive Heinrich Hiesinger said. ThyssenKrupp shares rose more than 3 per cent before settling back to trade 1.6 per cent higher at €20.04 by lunchtime, and were the top gainers in a 0.7 per cent-lower German DAX.

"They came out with a quite small 11 cents per share announcement, but it's symbolic of the company's transformation after it was pushed into a distressed asset sale and a capital increase a year ago," said analyst Seth Rosenfeld of Jefferies.

Hiesinger took over in 2011, inheriting a company that had spent €12 billion on expanding its steel businesses in Brazil and Alabama, only to be hit by a global economic crisis that choked steel demand, and a strengthening of Brazil’s real.

He began to turn ThyssenKrupp away from its steelmaking roots towards higher-margin businesses, but was still forced into a fire sale of the Alabama plant and an emergency rights issue last year to keep creditors at bay.

ThyssenKrupp reported its first net profit in four years yesterday, as all its units reported improvements except for logistics, which was depressed by two loss-making units the company wants to sell.

Underlying operating profit more than doubled to €1.33 billion in the year to end-September, and the company said that should rise to at least €1.5 billion this year, although it would need to make €2 billion before it could raise its dividend.

ThyssenKrupp is expected to be lifted in 2015 by a modest increase in steel demand in Europe. – (Reuters )