thyssenkrupp, expects its steel business to post a net loss of €1bn ($1.18mn) in its fiscal year ending September 30, 2020, even though most of its other divisions are expected to stabilize their performance.
The group’s financial position is also expected to benefit from the recent sale of its elevator division. The German steel conglomerate is also facing pressure from its shareholders to sell off the steel business due to its current financial position. However, the company recently revealed plans to invest in a 50-foot-long furnace at its Duisburg hot-strip mill, to increase its competitiveness in the market under a new strategy to help strengthen the division’s business.
thyssenkrupp steel reported a 24pc dip in order intake in the first nine months of the fiscal over the prior year while sales faced a 20pc decrease during the same period, attributed to soft demand from the Chinese automotive market in the second and third quarter. However, the packaged steel division reported stable operations. In the first nine months of the fiscal, Steel posted an EBIT loss of €706mn, rising 10 times from a loss of €77mn in the prior-year period.
The automotive technology division reported €157mn in EBIT losses during the nine months ended June 30, 2020, compared with €17mn in the same period last year, due to a global automotive industry shutdown caused by the COVID-19 pandemic.
The group posted a consolidated net loss of €1.97bn in the first three-quarters of the fiscal, compared with a €170mn loss in the prior-year period. The sale of its elevator business is expected to improve the group’s financial position toward the end of the year.
($1 = €0.85)