🔴 Exclusive webinar: The Secrets of ProPicks AI Success Revealed + November’s List FREEWatch Now

Thyssenkrupp swings to loss as costs climb

Published 08/14/2024, 01:06 AM
Updated 08/14/2024, 04:50 AM
© Reuters. FILE PHOTO: A view of the ThyssenKrupp headquarters in Essen, Germany, November 22, 2023. REUTERS/Jana Rodenbusch/File Photo
TKAG
-

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -Thyssenkrupp swung to a quarterly net loss due to higher than expected costs for legacy projects and halted the sale of one of its businesses, underscoring the industrial group's restructuring challenges and sending its shares to a new low.

The German company, which cut its annual profit forecast for the third time last month, is struggling to sharpen the focus of its sprawling empire amid subdued demand.

In particular, it is in the midst of a conflict-ridden process to divest half of the shares in its steel division to Czech billionaire Daniel Kretinsky.

Asked how Thyssenkrupp (ETR:TKAG) could regain investor confidence, new finance chief Jens Schulte said it needed to deliver higher profits and progress on restructuring.

The group, which also makes submarines and car parts, posted a net loss of 54 million euros ($59 million) for its fiscal third quarter, down from a profit of 83 million a year earlier, also blaming restructuring costs at its materials trading arm.

After trying to find a buyer for its Automation Engineering business for some time, Thyssenkrupp said it was halting the sale and exploring deeper restructuring measures for the division's powertrain unit.

"Strongly opposing market trends and one-time effects offset the progress made in the transformation of Thyssenkrupp in the third quarter," Schulte said, still hailing the group's quarterly performance given the numerous headwinds.

Shares in the company were down 3.6% at 0844 GMT, hitting a record low as it unveiled around 80 million euros of additional costs for past projects at its cement business that were not booked previously.

© Reuters. FILE PHOTO: A view of the ThyssenKrupp headquarters in Essen, Germany, November 22, 2023. REUTERS/Jana Rodenbusch/File Photo

Thyssenkrupp is currently at odds with its steel division TKSE regarding the level of funding that is needed to ensure a standalone future, with TKSE Chairman Sigmar Gabriel saying last week that the two sides were 1.3 billion euros apart.

($1 = 0.9113 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.