High depreciation on the steel business caused the industrial group Thyssenkrupp a loss of billions in the past financial year. Next year, however, there should be black numbers again.
Thyssenkrupp slipped deep into the loss zone in the past 2022/23 financial year (until the end of September). According to the company, the net loss after third-party shares is 2.1 billion euros. In the last financial year, the DAX group achieved a profit of 1.1 billion euros.
The demand for steel products had put a strain on the division’s business, but above all Thyssenkrupp had to make value adjustments in the steel division. Thyssenkrupp estimated depreciation on the fixed assets of its subsidiary Steel Europe at 2.1 billion euros. According to the company, they became necessary because of the gloomy economic environment and higher capital costs.
Thyssenkrupp had originally promised an “at least” balanced annual profit. Despite the annual loss, shareholders will receive an unchanged dividend of EUR 0.15 per share due to a significantly improved cash inflow. The cash flow had increased to 363 million euros.
Renewable energies for the steel division
The group’s new CEO, Miguel López, wants to restructure the steel division and make it more profitable again. To this end, the area is to be converted into climate-friendly steel production. This requires a large amount of renewable energy. For Steel Europe, the group is therefore in negotiations about a joint venture with the EPH holding company owned by the Czech billionaire Daniel Kretinsky. In East Germany, EPH includes the lignite companies MIBRAG and LEAG, which want to increasingly generate climate-neutral electricity from renewable energies in the future. “The specific design of a potential joint venture is the subject of ongoing negotiations,” it said.
The steel division, which is vulnerable to economic fluctuations, has been up for grabs for years. In the last financial year, the division’s earnings before interest and taxes (EBIT), adjusted for special effects, fell to 320 million euros from 1.2 billion a year ago, due, among other things, to lower prices for the material and high energy costs. The overall group result was 703 million euros, after around 2.1 billion euros in the previous year.
Profits for the current financial year in sight
Thyssenkrupp wants to return to profitability in the new financial year. The company expects an annual profit in the low to mid three-digit million euro range. The management around CEO López is assuming that the economic environment will continue to be difficult.
Adjusted EBIT is expected to rise to a high three-digit million euro amount, and Thyssenkrupp sees sales growing slightly.
Electrolysis daughter with high Order backlog
Yesterday, the Thyssenkrupp subsidiary Nucera, which specializes in electrolysis, presented its first results for the third quarter. Compared to the previous year, Nucera has made “strong” growth thanks to a large order backlog in water electrolysis. Nucera, which is listed in the SDAX small cap index, does not want to present concrete figures until mid-December. Nucera is of strategic importance for Thyssenkrupp because electrolysis with hydrogen allows steel production to be CO2-neutral.