Thyssenkrupp Sees Earnings Dropping in Weakening Economy
(Bloomberg) — Thyssenkrupp AG expects earnings to fall over the next year due to a combination of higher energy costs, inflation and rising interest rates.
Adjusted earnings before interest and taxes are expected to fall to the mid to high three-digit million euro range, below the €2.1 billion reported for the financial year ended Sept. 30, the company said Thursday. The company said the pace of its restructuring has slowed, and that it’s impossible right now to decide on the best step forward for its steel division due to the uncertain geopolitical and macroeconomic backdrop.
“The momentum of our transformation process has been dampened, but we have proven comparatively robust in the face of three external shocks — the pandemic, the semiconductor shortage and war,” Chief Executive Officer Martina Merz said in a statement accompanying full-year earnings.
Merz is leading a deep restructuring of the conglomerate, which was fighting for survival even before the pandemic and European energy crisis hit. Once synonymous with German industrial prowess, Thyssenkrupp has struggled for years to staunch a cash drain as a global steel glut compounded profound structural issues across the firm.
Still, the company expects to at least stem cash outflows for its 2022/23 financial year, ending a six-year streak. The company’s cash outflow narrowed to €476 million in the financial year just ended, less than the €1.3 billion drain seen in the previous financial year.
Improvement in the company’s operating performance will allow Thyssenkrupp to pay a dividend for the first time since 2018, the company said Thursday. The firm will propose paying a dividend of 15 cents a share to the company’s annual general meeting in February.
Thyssenkrupp said it still plans an initial public offering of shares in its Nucera hydrogen electrolysis unit, but said such a move was dependent on developments in financial markets.
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