Thyssenkrupp Lowers FY18 Adjusted Ebit Guidance Due to Costs

By Sarah Sloat

Thyssenkrupp AG (TKA.XE) said on Tuesday it now expects a key earnings figure to come in at the lower end of a previously forecast range in fiscal 2018, largely due to project costs in the industrial solutions segment.

The German conglomerate now expects adjusted earnings before interest and taxes in the fiscal year ending Sep. 30 of about 1.8 billion euros ($2.1 billion), compared with the EUR1.8 billion-to-EUR2 billion range forecast previously.

The new guidance follows a review of the industrial solutions segment, which is expected to report an adjusted Ebit loss of around EUR220 million in the third quarter, mainly due to additional expenses for extensive project analysis and a reassessment of individual projects.

"The main negative factors were higher expected total costs, particularly for a marine project in Turkey, a cement plant in Saudi Arabia and a biofuel power plant in Australia," Thyssenkrupp said.

Nevertheless, even before these effects, Thyssenkrupp said industrial solutions' adjusted EBIT in the quarter would be negative due to lower than expected sales.

It also now expects free cash flow before M&A to be negative, though significantly better than the previous year's negative EUR855 million, it said. The company previously forecast that figure would be positive.

Net income is still expected to be significantly better than in fiscal 2017, when the company reported EUR271 million in net income, Thyssenkrupp said.

Third-quarter results and a medium-term outlook for the business segments will be published as planned on Aug. 9, the company said.

Write to Sarah Sloat at sarah.sloat@wsj.com

(END) Dow Jones Newswires

July 31, 2018 15:00 ET (19:00 GMT)

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