Shares of Germany’s Thyssenkrupp saw a significant increase on Tuesday, rising 7.5% by 8:48 a.m. London time, after the company reported a narrowed net loss alongside a substantial impairment of 1 billion euros ($1.06 billion) in its struggling steel division.
In its fourth-quarter results, Thyssenkrupp announced adjusted earnings before interest and taxes (EBIT) of 151 million euros, exceeding the Visible Alpha consensus estimate of 120 million euros, as reported by Reuters. For the full fiscal year ending September 30, the company narrowed its net loss to 1.5 billion euros, a marked improvement from the 2 billion euros loss recorded in the previous year.
The company attributed its annual loss primarily to asset impairments totaling approximately 1.2 billion euros, with 1 billion euros specifically related to its Steel Europe division. CEO Miguel Lopez emphasized the critical nature of the current fiscal year, stating, “In respect of our main strategic issues, this will be a year of decisions – especially for Steel Europe and Marine Systems.” He also highlighted the company’s focus on enhancing performance across all business units while capitalizing on opportunities presented by the green transformation.
Thyssenkrupp, which operates in various sectors including submarine manufacturing and automotive parts, is in the midst of restructuring its Steel Europe division into an independent entity. Recently, the company completed the sale of a 20% stake in this division to EP Corporate Group (EPCG), an investment vehicle owned by Czech billionaire Daniel Krentisky. Negotiations are ongoing to establish a 50:50 joint venture.
In addition to its restructuring efforts, Thyssenkrupp is exploring the possibility of divesting its Marine Systems business and is currently in discussions with the German government regarding state participation.
The company’s annual statement also reflected broader economic challenges facing Germany, noting that the country has been grappling with political and economic turmoil. Business activity fell to a seven-month low in September, and the ruling coalition faced collapse earlier this month. Thyssenkrupp remarked, “When it comes to recovery, Germany continues to lag behind its European neighbors,” citing subdued global demand for industrial goods and weak domestic consumption as contributing factors to the ongoing investment crisis.
As Thyssenkrupp navigates these challenges and restructures its operations, the market’s positive response to its latest financial results signals cautious optimism about the company’s future prospects.
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