Thyssenkrupp AG cut its sales and profit forecasts after orders shrank and the German industrial giant reported another write-down of its struggling steel business. The company expects to return to profitability this fiscal year with stagnant sales after orders fell 13% in its fiscal first quarter.
For the quarter in question, which ended in late December, Thyssenkrupp reported a net loss of 314 million EUR, mainly due to an impairment of about 200 million EUR related to higher capital spending, mainly in the steel sector.
Shareholders have stepped up pressure on Thyssenkrupp’s management to speed up restructuring of the conglomerate, whose portfolio ranges from metals trading to submarine construction. Attempts to divest its unprofitable steel business have dragged on despite repeated write-downs.
The company is also considering selling its naval technology unit Thyssenkrupp Marine Systems, which makes ships, submarines and related electronic systems.
The steel business has weighed on the company’s overall performance for years, weighed down by high investment requirements and low steel prices. Negotiations for the sale of half of the division of Czech billionaire Daniel Kretinsky continue. The company said in November that talks were constructive with a focus on a potential joint venture.
For Marine Systems, Thyssenkrupp is exploring a majority stake sale to a private investor, a spin-off or an initial public offering (IPO). The German government is close to acquiring a minority stake in the shipbuilding unit, Handelsblatt reported earlier this month.
Once a leader in German industry, Thyssenkrupp has struggled for years to transform its business model. In June, Miguel Angel Lopez Borrego took over as chief executive after his predecessor, Martina Merz, left amid criticism over slow progress in restructuring the company.
