Frankfurt, November 22, 2023, The Europe Today: Germany’s Thyssenkrupp on Wednesday unveiled a 2.1-billion-euro ($2.3 billion) impairment on its steel unit due to a “gloomy” outlook, highlighting the challenge in efforts to win Czech energy group EPH as a co-owner for the business.
Shares in the industrial conglomerate still rose 5% to the top of Frankfurt’s midcap index as the group posted its first positive free cash flow before mergers and acquisitions, a key gauge for investors, in seven years.
As a result of the impairment, Thyssenkrupp, which has been trying to divest its steel division for several years, posted a 2-billion-euro net loss for the fourth quarter, while adjusted operating profit fell 45% to 88 million euros.
“The figures show that we have made progress with the transformation of Thyssenkrupp,” Thyssenkrupp CEO Miguel Lopez said, adding the group’s APEX programme was aimed at raising its performance.
The company, which proposed a stable dividend of 0.15 euros apiece, said free cash flow before M&A came in at 363 million euros.
Thyssenkrupp – which apart from steel, builds submarines, car parts and operates a large materials trading business – said it was in constructive and open-ended talks with EPH about a potential steel joint venture.
EPH, controlled by Czech billionaire Daniel Kretinsky, would support Thyssenkrupp Steel Europe with its energy expertise in any joint venture, Thyssenkrupp said.
Thyssenkrupp last month flagged a marked deterioration in the steel market, adding optimistic assumptions had been dampened by a mix of economic weakness in Germany and other markets as well as higher raw materials and energy costs.
Cheap Chinese steel imports into Europe have been an additional headache, along with the fact that Asian rivals do not have to bear the costs of CO2 emissions, which puts local players at a disadvantage.
