ThyssenKrupp Swings to Net Loss
February 12 2016 - 1:30AM
Dow Jones News
By Christopher Alessi
FRANKFURT--German industrial conglomerate ThyssenKrupp AG
reported a net loss of EUR23 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 EUR54 million and significantly missed
analysts' forecast for EUR40 million in net profit.
Sales declined 5% to EUR9.55 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 EUR234 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 EUR3 million. Meanwhile, Steel
Europe's adjusted EBIT fell to EUR51 million from EUR79 million,
and Steel Americas posted a loss of EUR74 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 EUR71 million, up from EUR4 million a year
ago. At the Elevator Technology division adjusted EBIT rose to
EUR203 million from EUR25 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 EUR4.4 billion in the first quarter
from a year-earlier EUR4.2 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 EUR1.6 billion and
EUR1.9 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 01:15 ET (06:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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