Thyssenkrupp points to big net loss this year, shares sink

(Sharecast News) - ThyssenKrupp said on Tuesday that it expects to big swing into the red this fiscal year on the back of restructuring charges related to its European steel operations, which the German firm is currently trying to sell to Jindal Steel International. The Essen-based industrial engineering and steel production company projected a net loss of between €400m and €800m over the 12 months to 30 September, compared with a net profit of €532m over the year just gone.

Sales over the coming year are expected to fall by 1-2% amid a "persistently challenging market environment", with declines seen in its Automotive Technology and Decarbon Technologies divisions.

Thyssenkrupp Steel Europe, which in September received a non-binding proposal from India's Jindal Steel which is currently being reviewed by the board, is currently undergoing a "strategic realignment" to cut costs and while avoiding compulsory redundancies.



The restructuring moves include terminating a long-term supply contract with Krupp Mannesmann due to "necessary capacity adjustments", with the annual shipment capacity expected to be reduced from around the current 11.5m tons to a target level of around 8.7m-9m tons.

"Our forecast takes account of the persistently challenging market conditions and of the efficiency and restructuring measures in our segments. Through the measures that are planned for the current year and already factored in - especially in the steel business and at Automotive Technology - we are creating the basis for sustainably improving our earnings," said chief financial officer Axel Hamann.

For the year just gone, sales fell 6% to €32.8m, though the order intake jumped 15% to €37.7bn. Adjusted EBIT increased to €640m from €567m.

Thyssenkrupp shares were down 9.2% at €8.68 by 0916 GMT.