In the second quarter, Thyssenkrupp lost money. Higher loan rates caused steel impairment costs. Operating earnings fell due to higher raw material, energy, and steel prices, although not as much as experts expected.
On Thursday in Essen, the business reported a January-March loss of 223 million euros. The corporation made 565 million euros last year. Thyssenkrupp’s steel unit lost roughly 350 million euros. The business said rising financing rates and capital costs caused the write-downs.
Adjusted profits before interest and taxes (EBIT) dropped from 802 million euros to 205 million euros due to higher expenses and lower steel prices. Analysts predicted a steeper decrease. Steel and trade lost heavily. Steel Europe surprised experts by losing money. Marine and automotive supply businesses did well.
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Fiscal 2022/23 (September) profit prediction was affirmed.
Sales fell from 10.6 billion euros to 10.1 billion euros but exceeded market forecasts. Order intake fell from 13.6 billion to 10.2 billion euros. Trading prices fell and enterprises were sold. Steel orders rose by nine percent, especially from the construction and car industries.
Despite the challenging circumstances, outgoing Group CEO Martina Merz was pleased. “The results show that we are now much stronger and more resilient,” she added. “The decentralized setup as a group of companies and portfolio focusing are paying off.”
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At the end of April, Merz requested that the Supervisory Board’s Personnel Committee terminate her contract immediately. The group suggested a Supervisory Board replacement. The plan calls for Miguel Ángel López Borrego (58), Norma’s temporary CEO, to become CEO on June 1.
thyssenkrupp CEO Merz is 60. She led the Group through a crisis as a mechanical engineer. Her contract was extended to 2028 last year. The future of the steel business, the most crucial project, remains uncertain. She also faced the IG Metall union, which recently attacked the structure of thyssenkrupp as a consortium of mostly autonomous enterprises supported by Merz and complained about a lack of an overall idea.
Merz trusts thyssenkrupp management. “The personnel change at the top of the Executive Board will not slow the company down in this phase of implementing the transformation,” she added. She stated we must continue and accelerate our trajectory. “The key strategic initiatives will continue to be systematically pursued.”
Thyssenkrupp reiterated its profits prediction for fiscal year 2022/23 (ending September) and expects adjusted operating earnings in the mid to high three-digit million euro range compared to 2.1 billion euros a year earlier. Management expects “at least” break-even net income. Before mergers and acquisitions, Thyssenkrupp had predicted “at least” break-even free cash flow./nas/he