Thyssenkrupp cuts forecasts again, citing ‘gloomy market environment’

Frankfurt — German conglomerate Thyssenkrupp cut its annual forecasts for sales and net profit for the second time in three months, blaming lower demand and prices at its steel unit and impairments at its materials trading division.

Shares sank 5.7% in morning trading after its downgraded outlook.

The scaled-back guidance underscores a challenging environment for companies focused on capital goods, which need to tackle elevated inflation, raw materials price swings and cooling global demand.

This includes cheap Asian steel imports that have been a key driver behind efforts to position Czech billionaire Daniel Kretinsky as a co-owner of Thyssenkrupp’s steel division, Germany’s largest, hoping this would make the business more competitive.

Thyssenkrupp is in talks with Brussels about tightening import conditions to support the local steel sector, CEO Miguel Lopez said, amid a cloudy global environment in which tariffs have become more frequent.

Highlighting a “gloomy market environment”, Lopez said the company had made progress with its turnaround since the start of the year, singling out steps to spin off its marine divisions, which may be sold to private equity firm Carlyle.

Thyssenkrupp, which makes submarines, car parts and bearings for the wind industry, now expects an annual net loss in the low triple-digit millions of euros for the fiscal year to September, it said on Wednesday, having previously forecast breaking even.

According to LSEG data, analysts on average expect a net profit of €203m ($220m) in the year to September. The company had already cut its outlook when it released first-quarter results in February.

Weakening demand led to impairments at its materials trading division, the company said, without specifying the amount.

Additional headwinds came from lower-than-expected quarterly results at Thyssenkrupp Nucera, in which Thyssenkrupp owns a majority. Thyssenkrupp Nucera’s  shares traded 8% lower.

Reuters