General view of the ThyssenKrupp industrial area in Duisburg, Germany, August 29, 2024. (Photo by Ying Tang/NurPhoto via Getty Images)
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german stocks thyssenkrupp It rose sharply on Tuesday after the company announced a narrower net loss and a 1 billion euro ($1.06 billion) impairment charge in its struggling steel division.
The company’s Frankfurt-listed shares were up 7.9% at 9:52 a.m. London time.
ThyssenKrupp reported adjusted profit before interest and taxes of 151 million euros in the fourth quarter, beating the Visible Alpha consensus of 120 million euros, according to Reuters. For the full fiscal year ending September 30, net loss after minority stakes narrowed to 1.5 billion euros, compared with a net loss of 2 billion euros the previous year.
The loss in the last financial year was mainly due to asset impairments totaling €1.2 billion, €1 billion of which was attributed to its Steel Europe division, it said.
“With regard to our key strategic issues, this fiscal year will be a year of decisions, particularly for Steel Europe and Marine Systems,” CEO Miguel Lopez said in a statement Tuesday.
“At the same time, we are working to further improve the performance of all our businesses and better capitalize on the opportunities presented by green innovation.”
Thyssenkrupp’s “smaller performance” in its fourth-quarter results improved the end to a difficult fiscal year, Citi analysts said in a note Tuesday. They added that higher free cash flow in the quarter led the company to a net cash position of €4.4 billion, ahead of Citi’s expectations.
In addition to producing steel, ThyssenKrupp, which also makes submarine and automobile parts, is currently in the process of restructuring Steel Europe into an independent company. Last summer, the company completed the sale of a 20% stake in the division to EP Corporate Group (EPCG), an investment vehicle owned by Czech billionaire Daniel Krentisky. The two companies are currently discussing the establishment of a 50:50 joint venture.
The struggling German industrial company is exploring a potential sale of its marine systems business and is still negotiating with the German government over state participation.
Germany has been hit by political and economic difficulties in recent months, with business activity falling to a seven-month low in September and the ruling coalition collapsing earlier this month.
“In terms of recovery, Germany continues to lag behind its European neighbors,” ThyssenKrupp said in its annual statement published Tuesday. “As an exporter, Germany continues to suffer from slowing global demand for industrial goods. Moreover, weak domestic demand further highlights the current investment crisis and weak consumer spending.”
