A crane lifts a steel coil at a plant of German steel maker ThyssenKrupp, in Duisburg, Germany. Picture: REUTERS/WOLFGANG RATTAY
A crane lifts a steel coil at a plant of German steel maker ThyssenKrupp, in Duisburg, Germany. Picture: REUTERS/WOLFGANG RATTAY

Frankfurt — German steelmaker Thyssenkrupp on Thursday said its steel unit faced operating losses of €1bn in 2020, raising pressure on it to fix or sell the division.

Shares in Thyssenkrupp, which this year sold its elevator unit to a private equity consortium for €17.2bn, fell by 16.2% on the news, with analysts pointing to the weak outlook.

The expected loss at Thyssenkrupp Steel Europe, the continent's second-largest player after ArcelorMittal, comes as the sector suffers from cheap Chinese imports, high raw material prices and weak automotive demand.

The group has outlined plans that could see the division sold, kept or combined with a peer, with India's Tata Steel, Sweden's SSAB and Germany's Salzgitter all considered potential partners.

CFO  Klaus Keysberg would not be drawn on consolidation efforts, reiterating only that all options were open.

"No steelmaker is making a profit at the moment. But in terms of performance, we're certainly lagging the competition," he told journalists during a call, adding the company was in talks about additional job cuts.

The unit, which employs nearly 28,000, has annual personnel costs of €2bn.

Thyssenkrupp said its fiscal third-quarter adjusted operating loss from continuing operations, which strips out the elevator operations, came in at €679m, less than the up to €1bn it had flagged in May.

"We have worked hard to keep our costs under control and secure liquidity," CEO Martina Merz said. "As a result we came through the crisis slightly better than initially feared in the third quarter overall."

The company said most businesses were stabilising or even improving in the quarter to September compared with the previous three months, suggesting it has passed the worst of the coronavirus crisis impact.

Reuters

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