ThyssenKrupp Swings to Net Loss
12 February 2016 - 5:50PM
Dow Jones News
FRANKFURT—German industrial conglomerate ThyssenKrupp AG
reported a net loss of €23 million ($26.1 million) for the first
quarter of fiscal year 2016, hurt in large part by weakness in the
steel and materials businesses.
The net loss for the three months ended Dec. 31 compares with a
year-earlier net profit of €54 million and significantly missed
analysts' forecast for €40 million in net profit.
Sales declined 5% to €9.55 billion, weighed down by volume and
price-related decreases in the steel and materials businesses.
The company's closely watched adjusted earnings before interest
and taxes fell by 26% to €234 million due to price and margin
pressure in the steel and materials businesses.
Earnings at the Materials Services business were roughly level
with the year-earlier period at €3 million. Meanwhile, Steel
Europe's adjusted EBIT fell to €51 million from €79 million, and
Steel Americas posted a loss of €74 million.
However, the group reported continued earnings growth at its
capital goods businesses.
Components Technology, which supplies the auto industry with
parts such as electrical-steering systems and engine components,
posted adjusted EBIT of €71 million, up from €4 million a year ago.
At the Elevator Technology division adjusted EBIT rose to €203
million from €25 million.
Since taking the helm in 2011 amid corruption scandals and
internal divisions, Chief Executive Heinrich Hiesinger has moved
the company away from its traditional steelmaking business and
transformed it into a diversified capital goods company. The
backbone of the capital goods segment is the world-leading elevator
and escalator business.
Mr. Hiesinger has succeeded in bringing the company back into
the black in the past two fiscal years, but has acknowledged that
significant challenges remain, including a high net debt. Net
financial debt increased to €4.4 billion in the first quarter from
a year-earlier €4.2 billion.
Thyssenkrupp's challenges have been further compounded by a
shaky global economy that has weighed on steel prices.
The company reiterated its guidance for fiscal 2016, saying it
still expects to achieve adjusted EBIT between €1.6 billion and
€1.9 billion. However, it cautioned that the outlook is predicated
on a "significant recovery" of the materials markets in the second
half of the fiscal year.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
February 12, 2016 01:35 ET (06:35 GMT)
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