Depreciation in the steel business
Thyssenkrupp is slipping deep into the red
November 22, 2023, 9:40 a.m
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Originally, Thyssenkrupp had promised an “at least” balanced annual profit. Now, however, the industrial group is rowing back after a loss of billions and is coming up with bad news.
Billions in depreciation on the steel business pushed the industrial group Thyssenkrupp deep into the red in the last financial year. The bottom line was that there was a net loss of around two billion euros in 2022/23 (September 30th), as the company announced in Essen. Thyssenkrupp put the value adjustments on the fixed assets of the subsidiary Steel Europe at 2.1 billion euros. It was said that the depreciation was necessary due to the deteriorating economic environment and higher capital costs.
Thyssenkrupp had originally forecast an “at least” balanced annual profit, after a profit of 1.2 billion euros in the same period last year. Thanks to a significantly improved cash inflow, shareholders will still receive an unchanged dividend of EUR 0.15 per share. Falling steel prices and simultaneously rising raw material and energy costs impacted earnings before interest and taxes (EBIT) adjusted for special effects, which fell from almost 2.1 billion to 703 million euros. Sales fell by nine percent to 37.5 billion euros.
Thyssenkrupp wants to return to profitability in the new financial year. The company expects an annual profit in the low to mid three-digit million euro range. The management around CEO Miguel López is assuming that the economic environment will continue to be difficult. Adjusted EBIT is expected to rise to a high three-digit million euro amount, and Thyssenkrupp sees sales growing slightly.