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Thyssenkrupp slashes outlook and flags weak units
[BERLIN] German industrial conglomerate Thyssenkrupp on Thursday reported lower losses in the third quarter, flagging up three struggling businesses and slashing its forecasts as it tackles a massive restructuring.
Essen-based Thyssenkrupp lost 77 million euros (S$119.3 million) in April-June, the third quarter of its financial year, it said in a statement.
In 2018 it had lost 114 million euros over the same period.
Meanwhile revenues held steady, at 10.8 billion euros, but operating, or underlying profit plunged 25 per cent, to 183 million euros.
Thyssenkrupp said its woes over its first nine months - with a net loss of 170 million euros, after a profit of 229 million last year - were due to "increasingly weaker global economic momentum, a marked downturn in the car sector and continued high import pressure for steel."
"Added to this was the massive increase in raw material prices, especially for iron ore," the group said.
Bosses highlighted three units they saw as "currently not competitive": a business making springs and stabilisers for car chassis, one building production lines for carmakers and a third building heavy steel plate for construction, shipbuilding and pipelines.
While it will first attempt to restructure the operations, "the company will examine other strategic options" if necessary.
Thyssenkrupp, whose products range from submarines to car parts, lifts and construction materials, gave up on a joint venture in steel with India's Tata when the European Commission's competition arm would not wave it through.
The setback also nipped in the bud a plan to split into two separate businesses that had been urged by activist investors.
But TK still expects to partially float its highly profitable elevators business on the stock market next year, valued by analysts at around 14 billion euros, and switch to a looser "holding" structure.
It announced some 6,000 job cuts worldwide in May, with 4,000 falling in Germany and 2,000 in the steel division.
Thyssenkrupp cut down its earnings forecast for its full financial year, expecting an adjusted operating profit of around 800 million euros - down from its previous outlook of 1.1-1.2 billion euros.
The group also expects to make a net loss on the year.