The German conglomerate devalued the assets of its steel business for the second time in three months
German industrial conglomerate Thyssenkrupp has lowered its sales and net profit forecasts for the 2023/2024 financial year, in particular due to a drop in sales in the steel and commodities businesses. The company said in a statement.
One of the reasons for a decrease in planned profit is losses due to impairment of fixed assets. In the first quarter (October-December 2023), the group damaged its steel business by a further 200 million euros, adding this amount to the asset impairment of 2.1 billion euros in November due to high gas and other raw materials.
According to the company, in the first quarter of fiscal year 2023/2024, Thyssenkrupp's operational performance was in line with expectations in a persistently challenging market environment. The total volume of orders received decreased to €8.0 billion, compared to €9.2 billion in the same period last year, mainly due to lower prices and demand in the Materials Services and Steel Europe divisions.
Sales totaled 8.2 billion euros (9.0 billion euros in the first quarter of the previous fiscal year).
“In the face of continued weakness in the global economy and geopolitical conflicts, Thyssenkrupp delivered a relatively strong first quarter, in line with our expectations,” said CEO Miguel Lopez.
He added that the group will continue to advance vigorously in its transformation process. This applies to both performance indicators and portfolio indicators, as well as the restructuring that was launched in preparation for the “green” transition.
Regarding the steel division, Thyssenkrupp noted that European steel mills are being affected by a weak economy, constantly rising raw material prices, high energy prices and strong competition from non-European market participants.
In the first quarter of fiscal year 2023/2024, Steel Europe's orders and sales amounted to €2.4 billion, compared to €3 billion in the same period of the previous fiscal year (for both indicators). As noted, this was mainly due to a sharp decline in prices. Order intake fell mainly due to lower demand from the automotive industry.
Thyssenkrupp expects sales in the 2023/2024 financial year to be at the level of the previous year (37.5 billion euros), although a slight increase was previously predicted.
As Compraço previously reported, in the 2022/2023 fiscal year (until the end of September), Thyssenkrupp recorded a net loss of 2 billion euros, which includes asset impairment losses, mainly in Steel Europe. In the previous fiscal year, the company's net profit was 1.2 billion euros.
