* Q2 pretax profit 4.5 mln eur vs poll avg for loss
* Earnings bolstered by one-off gain from Aurubis holding
* Affirms outlook for pretax earnings approaching breakeven
* Shares pare early gains, trade 0.1 pct lower
(Adds details on Aurubis holding)
FRANKFURT, Aug 13 Germany's second-largest
steelmaker Salzgitter reported an unexpected
second-quarter pretax profit on Wednesday as income from its
holding in copper smelter Aurubis and cost cuts
The company swung to a profit of 4.5 million euros ($6
million) for the three months through June, from a loss of 285
million euros in the year-earlier period, exceeding the
consensus forecast for a 4.3 million loss in a Reuters poll.
Salzgitter's strip steel and plate businesses remained in
the red in the second quarter, albeit with smaller losses than a
year earlier, and the loss was more than offset by income
related to the group's 25 percent holding in Aurubis.
Its shares rose as much as 3.3 percent in early trade but
later turned negative to trade 0.1 percent lower at 26.68 euros
by 1057 GMT on disappointment that the earnings surprise was
mostly due to a one-time effect.
"Despite the headline beat, we think the market is likely to
be underwhelmed by the relatively poor performance of the core
steel businesses compared with peers," Citi analysts said in a
note. They have a "buy" rating on Salzgitter's stock.
The $500 billion-a-year global steel industry, a gauge of
economic health, has suffered from a drop in demand in Europe
and worries over Chinese growth prospects.
But lobby group Eurofer said last month that data on steel
demand showed a recovery of the auto and construction sectors
was finally feeding through to steelmakers this year.
Salzgitter affirmed its outlook for 2014 pretax earnings to
approach breakeven as it cuts more than 1,500 jobs, or 6 percent
of its workforce, to reduce expenses. That compares with a
consensus forecast for a 10 million euro loss for the year.
"We are expecting improvements in the steel divisions as
well, and even as the company has confirmed its full-year
outlook, we clearly see Salzgitter on the mend," said Bankhaus
Lampe analyst Marc Gabriel, who recommends investors buy the
ArcelorMittal, the world's largest steelmaker, cut
its guidance this month after lower-than-anticipated iron ore
prices ate into the profit of its mining business.
Germany's top steelmaker ThyssenKrupp is due to
publish quarterly results on Thursday.
($1 = 0.7484 Euros)
(Reporting by Maria Sheahan; Editing by Thomas Atkins)