Thyssenkrupp has posted a EUR9m (US$10.3bn) net loss for the first half of this year, citing a “sharp downturn” in the environment for materials businesses.
The overall performance of the Group continues to be “overshadowed” by the extremely difficult conditions in the materials markets,” said a Thyssenkrupp statement.
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High import pressure and customer caution were reflected in the sharp drop in material prices in the first half of the current fiscal year in the order intake, sales and above all earnings of the materials businesses, it adds.
Against this background Thyssenkrupp is lowering its forecast for the full fiscal year. Material prices remained under pressure well into the second quarter and thus longer than expected, while price falls were also sharper than anticipated. This resulted in substantial windfall losses in the second quarter.
“Our half-year results still reflect the very weak situation on the materials markets,” said Thyssenkrupp CEO, Heinrich Hiesinger. “While we are now seeing a recovery in material prices, it is coming later than we originally expected and from a lower level and will also be reflected in our figures with a time lag.”
The board now expects the Group to achieve full-year adjusted EBIT of at least EUR1.4bn, with an efficiency programme contributing EUR850m.
The capital goods businesses will further improve operating earnings compared to the first half. Due to price recovery and cost-reduction measures, the materials businesses will achieve significant improvements in the second half of the fiscal year, provided the Brazilian real remains largely stable, maintains Thyssenkrupp.
Full-year net income is expected to come in at the prior-year level. Depending on payment timing on major orders, free cash flow before M&A will lie between a low 3-digit million euro negative and break-even.
