Thyssenkrupp Stock Down On Q1 Loss, FY24 Warning; To Cut 2,370 Jobs

(RTTNews) - Shares of thyssenKrupp AG were losing around 9 percent in the morning trading on Germany's XETRA after the industrial engineering and steel company reported Wednesday a net loss in its first quarter, compared to prior year's profit amid weak sales and order intake, as expected, due to market effects. The company also trimmed its earnings and sales forecast for fiscal 2024 on weak demand, but maintained outlook for adjusted EBIT.

thyssenkrupp further said that in the first quarter, it has initiated the divestment process for the activities of thyssenkrupp Industries India, which is part of the Decarbon Technologies segment. The company is active in sectors including mining, energy and sugar.

On January 22, thyssenkrupp signed an agreement to sell a 55-percent stake to a consortium of the previous co-owners. The closure of the deal is likely to take place in the third quarter, following which thyssenkrupp will reduce its headcount by around 2,370 positions.

Miguel Lopez, CEO of thyssenkrupp, " In the face of the ongoing weakness of the global economy and geopolitical conflicts, thyssenkrupp displayed a comparatively robust performance in the 1st quarter in line with our expectations. Earnings were stabilized by the performance-enhancing measures that we initiated and implemented - the first fruits of our 'APEX' performance program. …..We will continue to press ahead vigorously with the transformation of thyssenkrupp."

Looking ahead for fiscal 2024, the company now expects net income to increase to around break-even, while previous estimate was to increase to a positive figure in the low to mid three-digit million euro range.

Further, due to volume reductions at Steel Europe and Materials Services, thyssenkrupp now expects sales to be at the prior-year level. It had previously assumed a slight increase.

Meanwhile, thyssenkrupp continues to anticipate that adjusted EBIT will rise to a figure in the high three-digit million euro range, compared to prior year's 703 million euros.

The company aims to achieve an adjusted EBIT margin of 4 to 6 percent for the group.

For the first quarter, net loss attributable to shareholders was 314 million euros, compared to profit of 75 million euros last year. Loss per share was 0.50 euro, compared to earnings per share of 0.12 euro a year ago.

Adjusted EBIT was 84 million euros, down from 168 million euros last year, attributable to the reduced earnings contributions from Steel Europe due to lower sales, and, as expected, the declining earnings of the individual Decarbon Technologies businesses.

Sales amounted to 8.18 billion euros, down 9 percent from last year's 9.02 billion euros.

At 7.97 billion euros, order intake was down 13 percent from last year's 9.18 billion euros, mainly due to economic effects with price and demand-induced declines at Materials Services and Steel Europe.

In Germany, thyssenkrupp shares were trading at 5.03 euros, down 8.85 percent.

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