ThyssenKrupp Lowers Guidance
May 10 2016 - 1:40AM
Dow Jones News
FRANKFURT—ThyssenKrupp AG on Tuesday lowered its guidance for
the current fiscal year, citing the significant drop in global
prices of materials like steel in the first half, even as the
German industrial conglomerate reported a 26% jump in net profit
for the second quarter.
ThyssenKrupp now expects to reach adjusted earnings before
interest and taxes of "at least" €1.4 billion for fiscal 2016,
compared with a prior estimate in a range of €1.6 billion to €1.9
billion.
"While we are now seeing a recovery in material prices, it is
coming later than we originally expected and from a lower level and
will also be reflected in our figures with a time lag," Chief
Executive Heinrich Hiesinger said in a statement.
But the company said it expects to achieve significant
improvements at its materials businesses in the second half of the
fiscal year due to the recovery in materials prices and
cost-reduction measures.
Net profit for the three months ended March 31 was €61 million,
compared with €48 million during the same period a year prior,
largely the result of fewer special items such as restructuring
costs. However, that figure fell short of analysts' forecasts.
Analysts had predicted a second-quarter net profit of €67 million,
according to a recent poll conducted by The Wall Street
Journal.
The company's closely watched adjusted EBIT plunged by 20%, to
€326 million, held back by the materials businesses. Stronger
earnings at the capital-goods business, including the elevator
division, weren't enough to offset the weak performance at the
steel and materials-services businesses, the company said.
Sales dropped by 10%, to €9.85 billion, hurt by lower volumes
and the drop in materials prices.
ThyssenKrupp also said that its net financial debt had increased
by 4%, to €4.82 billion, while the loss of free cash flow deepened,
dropping to negative €371 million.
The company's fiscal year runs from Oct. 1 to Sept. 30.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
May 10, 2016 01:25 ET (05:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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