German industrial titan Thyssenkrupp said Thursday it returned to profit at the start of the year due to the sale of an Indian business but its troubled steel division took a hit.
The group, which makes everything from steel to submarines, reported a net profit of 167 million euros ($187 million) for the January to March period, compared to a 72-million-euro loss a year earlier.
It is the first time the company has booked a profit after six consecutive quarters in the red, although analysts surveyed by financial data firm FactSet had expected a higher figure.
Once a symbol of German industrial might, Thyssenkrupp has suffered as high costs at home, falling prices for its products and fierce competition from Asian rivals hammered its traditional steel business.
Its latest earnings were boosted by the sale of Thyssenkrupp Electrical Steel India.
Its steel division, Steel Europe, took a 90-million-euro hit due to the “gloomy economic situation, persistently high energy costs and planned investments in decarbonising the business”, the group said.
Overall sales in the group’s second quarter slid five percent to 8.6 billion euros due to weaker demand and lower prices while orders also fell.
Thyssenkrupp has embarked on a major restructuring, announcing last year it would cut 11,000 jobs in the steel division, and is also slashing headcount at its automotive unit.
CEO Miguel Lopez said Thyssenkrupp expected the second half of its financial year to be marked by “a more stable market environment and positive effects from the measures we have initiated”.
He confirmed the full-year outlook, which forecasts a return to profit of between 100 million and 500 million euros after two years of losses.
The group warned, however, that the rest of the year would be “characterised by uncertainties about future global economic growth”.
US President Donald Trump’s tariff blitz — including 25-percent levies on steel and aluminium imports — has sent markets into a tailspin and triggered fears of a global recession.
This story was originally featured on Fortune.com
Recent Comments