According to the company’s forecast, earnings for the year as a whole will fall to a high three-digit million figure.
(Photo: imago images/Rupert Oberhäuser)
Dusseldorf The Thyssen-Krupp industrial group is struggling with price pressure in its materials business. The company announced on Tuesday that earnings before interest and taxes (EBIT), adjusted for special effects, shrank by 33 percent to EUR 254 million in the first quarter of the 2022/23 financial year.
As expected, this is largely due to the price development with the associated falling margins in the Materials Services division. The area only achieved an operating profit of 20 million euros in the quarter – after 219 million in the same period last year.
Thyssen-Krupp confirmed the outlook, according to which adjusted EBIT for the full year will fall to a value in the mid to high three-digit million euro range, after a profit of 2.1 billion euros most recently. In the current second quarter, however, the operating result will fall compared to the first quarter, according to the presentation on the quarterly balance sheet.
CFO Klaus Keysberg said it was still difficult to assess how the economy would develop. The group is driving improvements in performance and the conversion. ThyssenKrupp boss Martina Merz wants to set up the steel division independently and list the hydrogen subsidiary Nucera on the stock exchange. Due to the uncertain economic development, she recently put on the brakes.
In contrast to the materials trade, the steel business was still able to push through high prices in the first quarter. “Due to the longer-term contracts, the segment was only slightly affected by the falling spot market prices,” it said. Despite sharp increases in raw material and energy costs, the division’s adjusted EBIT improved by 42 percent to EUR 177 million.
The bottom line was that the entire group after third-party shares made a profit of 75 million euros in the quarter – a decrease of 29 percent. The free cash flow before M&A, which has received a lot of attention on the market, was minus 365 million euros – an improvement after a minus of 858 million euros in the same period of the previous year. The management confirmed that it is aiming for at least a balanced value here as well as for the net profit in the financial year.
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