Thyssenkrupp Takes a Hit with 2.0 Billion Euro Loss
The iconic Thyssenkrupp Group, hailing from Essen, isn't smiling these days. The corporation unveiled a gloomy financial report for the recent fiscal year, revealing a devastating net loss of 2.0 billion euros. In stark contrast, the previous year boasted a profit of 1.1 billion euros. The grim announcement came on Wednesday.
What a difference a year makes! The latest figure represents a significant blow to Thyssenkrupp's financial standing. The principals behind this harsh reality? Rising energy costs, sky-high interest rates, and a steep decline in steel prices.
The weight of these challenges significantly impacted the adjusted operating profit (EBIT), causing it to plummet by an alarming 66% to 703 million euros. Notably, the steel division, Thyssenkrupp Steel Europe, saw its operating profit fall by a staggering 73% to 320 million euros.
This downturn has been weighing down on Thyssenkrupp Steel Europe for years. The division has grappled with plummeting prices and fierce competition on the Asian market. The corporation is currently engaging in "constructive and open" talks with billionaire Daniel Kretinsky and his holding EPH, debating a potential joint venture. Thyssenkrupp shares that the future shape of this strategic partnership is under negotiation.
Despite the bleak financial landscape, Thyssenkrupp's Automotive Technology and Materials Services segments faced challenging market conditions, negatively impacting their earnings. Fortunately, the Decarbon Technologies and Marine Systems divisions demonstrated bursting growth in their earnings contributions. Steel Europe also experienced an impressive uptick in earnings due to higher energy-related benefits and decreasing raw material and energy costs. Regrettably, restructuring provisions of 42 million euros further contributed to the net loss. In the first quarter of the current fiscal year, the net loss of 33 million euros was attributed to both the operating results and lower impairments compared to the preceding year.
Eliminating the restructuring provisions, earnings would have showed a slightly positive result.
