Germany's Thyssenkrupp cuts outlook as market environment remains weak

Thyssenkrupp's logo is seen outside elevator test tower in Rottweil·Reuters
Christoph Steitz
Updated 2-min read
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By Christoph Steitz

FRANKFURT (Reuters) -German conglomerate Thyssenkrupp on Thursday cut its full-year outlook, citing weak demand for its products that is not expected to stabilise in the short-term and sending its shares lower in late Frankfurt trade.

The company, which makes steel, submarines and car parts, warned that measures of an efficiency programme launched last year, dubbed APEX, had been able to mitigate "negative developments of the market, but cannot fully compensate for these effects".

The company, which caters to markets and industries worldwide, did not provide further details on the reasons for the lowered guidance ahead of full third-quarter results scheduled for Aug. 14.

Frankfurt-listed shares in the company, which is seeking to sell 20% in its ailing steel division to Czech billionaire Daniel Kretinsky, were 3.4% lower at 1839 GMT.

The company now expects adjusted operating profit (EBIT) of more than 500 million euros ($543 million) for the fiscal 2023/2024 year ending in September, having previously forecast a high triple-digit million euro sum.

Full-year sales are expected to fall by 6-8%, indicating revenues of 34.5-35.3 billion euros, below the 35.663 billion LSEG estimate.

Thyssenkrupp's closely watched free cash flow before mergers and acquisitions (M&A), a key gauge for investors regarding the group's operational performance, is now expected to turn negative at 100 million euros.

It was previously expected to be positive in a low-triple digit million euro range.

The group, which is also in talks to sell its warship division to Carlyle and German state lender KfW also released preliminary results for the third-quarter, with sales of 9 billion euros coming in below the 9.27 billion LSEG estimate.

Preliminary adjusted EBIT came in at around 150 million euros, the company said, adding free cash flow before M&A for the period was at a negative 250 million euros.

($1 = 0.9217 euros)

(Reporting by Christoph Steitz; Additional reporting by Gursimran Kaur; Editing by Kevin Liffey and Chizu Nomiyama)