Thyssenkrupp hails turnaround as he takes heavy losses

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German industrial group Thyssenkrupp hailed a successful turnaround as it nearly broke even after years of board turmoil and declining profits.

Profits for the Essen-based group exceeded market expectations during the 12-month period to the end of September. During the previous year, hit by the pandemic, he had fallen to a loss of several billion euros and pledged to “stop the bleeding”.

Shares rose 4% to € 10.60 in morning trading in Frankfurt.

Once the most powerful conglomerate in the country, Thyssenkrupp quickly shrunk. It sold its lucrative elevator and escalator division to private equity groups in 2019 for € 17 billion, and has since closed or sold several smaller units, including mining and carbon components divisions.

These disposals, combined with a modest recovery in its historic steel activity, enabled the German group to post a net loss of 19 million euros, against a loss of 5.5 billion euros for the 2019-2020 financial year. .

“After two years of intensive transformational work, we can now say that the turnaround is evident and that Thyssenkrupp is heading in the right direction,” said Managing Director Martina Merz. “However, huge challenges remain.”

In particular, Thyssenkrupp is still considering options for its vast steel plant, which operates Europe’s largest steel plant in Duisburg.

A high-profile merger attempt with Tata Steel was blocked by Brussels in 2019, and a subsequent bid for the unit by Liberty Steel from British tycoon Sanjeev Gupta collapsed in February after failing to find funding.

The company is now considering a spin-off of the steel division, which posted a pre-tax profit of € 116m for the year, after falling to € 820m last year, the sector continuing to benefit from a strong increase. demand and a favorable pricing environment.

“We are still convinced that a stand-alone solution offers the best future prospects for the steel industry,” said Merz.

But while praising the “current market trend”, which has seen imports of cheap steel from China fall sharply and automakers’ demand for premium light steel, she warned. that Thyssenkrupp needed a “regulatory framework providing planning certainty, especially with a green transformation view”.

Although the company is exploring the use of hydrogen to power its blast furnaces, Thyssenkrupp still emits 25 million tonnes of CO2 per year, largely from its steel plant.

Separately, the group confirmed that it was exploring an initial public offering for its small hydrogen company, and said it had managed to cut around 8,000 of the nearly 13,000 jobs it intended to cut when it closed. last restructuring. Thyssenkrupp still employs more than 100,000 people worldwide.

The company, whose two main shareholders are the Krupp Foundation and activist investor Cevian, also confirmed that it will not pay a dividend for the third year in a row.

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