* Steelmaker optimistic for first half of new business year
* Says stable Chinese economy, recovery in Europe help
* Political risks in U.S., Brazil complicate planning
(Updates with CEO, details on forecast, shares)
VIENNA, June 1 Voestalpine's
first-half earnings should rise strongly but political
uncertainties in the United States, Europe and Brazil made it
difficult to give a second-half forecast, the Austrian
steelmaker said on Thursday.
Its 2017-18 financial year that began in April got off to a
strong start with higher demand from various industries thanks
to a stable Chinese economy, a recovery in Europe and new
projects in emerging markets, the Linz-based company said.
For 2016-17, adjusted earnings before interest and tax
(EBIT) rose 3.1 percent to 839.9 million euros ($944 million),
beating its forecast for unchanged earnings, supported by solid
car industry demand and a healthier oil and gas sector.
Voestalpine's shares jumped as much as 2.7 percent in early
trading on Thursday but were 1.8 percent lower by 0927 GMT.
Like its rivals, Voestalpine has had to deal with the
fallout from sharp price falls, strong international competition
and overcapacity in the sector, despite its focus on premium
Chief Executive Wolfgang Eder told reporters a new direct
reduction plant in the United States and new wire production in
Austria should help keep its core earnings (EBITDA) margin
stable at 13.6 percent this financial year.
But several political risks made it difficult to form a
clear picture going forward. Eder said it was unclear when U.S.
tax reductions and new infrastructure projects would come in, or
what impact they might have.
U.S. President Donald Trump pledged during his election
campaign last year to introduce an extensive infrastructure
package as well as substantial tax reductions.
"We don't know how matters stand and how political decisions
might affect the economy," Eder said, adding that the company
had to be prepared for import restrictions in the United States.
Other political challenges which could influence its
business included uncertainty in Brazil, Voestalpine's biggest
South American market, and the European Union's relationship
with Russia, Eder said.
Voestalpine's steel division, which makes high-quality steel
strips and other materials primarily for the automotive
industry, reported a 20 percent increase in EBIT.
While demand for railway infrastructure projects weakened
into the beginning of 2017, business with the oil and gas
industry strengthened over that period, the company said.
It proposed to increase its dividend to 1.10 euros per share
from the previous year's 1.05 euros.
($1 = 0.8898 euros)
(Reporting by Kirsti Knolle; editing by Francois Murphy and