thyssenkrupp warned that its operating loss could hit €1bn ($1.1bn) during the April to June quarter—Q3 of its fiscal 2020—due to the COVID-19 crisis.
The company expects to take the hardest hit of its fiscal year during the third quarter. As a result, its adjusted EBIT will be a loss in FY2020, following a €110mn loss the previous year.
Martina Merz, thyssenkrupp’s chief executive officer, stated that COVID-19 has presented enormous challenges for the company this year, and the full impact of the crisis on its businesses is not yet known, but that the economic disruption will affect supply chains and global demand for the company’s products. The company recently sold its elevator division and began implementing a steel-focused strategy.
thyssenkrupp’s performance in H1 FY2020 was significantly impacted by the initial effects of the COVID-19 pandemic. Additionally, the weak automotive sector, as well as lower prices and declining volumes sold in its materials businesses, negatively impacted the company’s performance.
thyssenkrupp’s sales declined by 4pc to €15.9 billion in H1 FY2020, during which time it accrued a €1.3bn loss, which includes the effect from discontinued operations, compared to a loss of €93mn during same period last year.
Due to declining shipments, a consequence of the pandemic, and continuing cost pressure, Steel Europe’s adjusted EBIT declined to a loss of €372mn in H1 FY2020 against a profit of €76mn during the same period in FY2019.