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Thyssenkrupp has written down its steel business by a further €1bn as Germany’s largest steelmaker warns of structurally lower demand from European industry as it struggles with the cost of decarbonisation.
The Essen-based group on Tuesday revealed a full-year net loss of €1.4bn, attributing it mainly to the writedown — an improvement on the €2bn loss posted the year before, when the energy-intensive company still grappled with high gas prices. Sales slumped 7 per cent to €35bn.
The company’s share price, which has halved in the past year, was up 2 per cent to €3.40 in Frankfurt on Tuesday morning, helped by the decision to maintain the dividend at €0.15 per share.
The writedown marks the conglomerate’s second asset impairment in two years, following a €2.1bn writedown on its struggling steel unit last November.
Thyssenkrupp, once a symbol of German industrial might, has after years of underperformance become focused on selling off assets, including the steel business and its submarine subsidiary, Thyssenkrupp Marine Systems.
After nearly two years of negotiations, US private equity group Carlyle last month pulled out of bidding for the naval contractor after it faced indecision and scepticism in Berlin about its involvement in a critical German defence player.
Thyssenkrupp has said it will instead pursue an initial public offering, as rumours swirl of potential takeover interest by other groups, including family-owned Lürssen.
Discussions over the future of the steel business are under way with Czech billionaire Daniel Křetínský, who this year bought 20 per cent of the steel division and has signalled an interest in lifting the stake to 50 per cent.
These have, however, been complicated by infighting at the group over the cost associated with the division’s transition to making “green steel” using hydrogen and electricity rather than gas.
In August, several senior executives, including steel chief Bernhard Osburg and the division’s supervisory board chair Sigmar Gabriel, resigned in protest over Thyssenkrupp chief executive Miguel López’s handling of the green transition and the sale to Křetínský.
The upheaval at Thyssenkrupp, which has since appointed new steel leadership, has unsettled German authorities. Berlin and local authorities have together pledged €2bn to support the company’s decarbonisation efforts, a critical step in developing a hydrogen market for Europe’s largest economy.
Thyssenkrupp on Tuesday said it expected to return to profit next year, forecasting net income in the next fiscal year to reach €100mn-500mn. It added that “a large part” of negative market effects this year had been cushioned by an extensive savings programme, which it said would be extended.
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