Steel Restructuring Update: Thyssenkrupp's Recent Profits Amid Ongoing Turbulence
Thyssenkrupp Revives Profit Margins, Yet Persisting Challenges Linger in Steel Division - Steel conglomerate Thyssenkrupp posts earnings recovery amidst ongoing industry adversity.
Thyssenkrupp managed to post a profit after six consecutive quarters in the red, mainly due to the sale of Thyssenkrupp Electrical Steel India, adding a post-tax profit of around 270 million euros. Despite this, the company expects an operating profit of 600 million to one billion euros, a decrease from the previous year's 184 million euros, primarily due to lower revenues and lower production capacity utilization.
Their steel division, however, slipped into the red with a loss of 23 million euros, contrasting last year's operating profit of 68 million euros. Yet, the company is pushing ahead with the restructuring of its steel division, aiming to strengthen its competitiveness and secure its future.
In a broader strategy, Thyssenkrupp has engaged in negotiations with the IG Metall trade union to avoid layoffs and instead focus on enhancing operational efficiency. They presented an industrial concept, which forms part of their long-term vision. The aim is to reach a collective bargaining agreement by summer 2025.
A key location, Kreuztal-Eichen plant in North Rhine-Westphalia, will see decisions made regarding its future by 2027/2028. The company is also considering options to divest its materials trading business, which could be valued at up to €2 billion.
The recently re-established profitability is significant, but the European market is proving challenging, with ongoing restructuring and industry dynamics adversely affecting the company's steel division. The success of the APEX performance program is key to improving profitability.
As the year progresses, resolving wage agreements will be crucial for Thyssenkrupp to proceed with selling additional stakes in its steel business to investors like Daniel Kretinsky, which could further impact its financial projections for the year.
- ThyssenKrupp
- Steel division
- Restructuring
- Industrial concept
- Kreuztal-Eichen plant
- APEX performance program
- Daniel Kretinsky
- ThyssenKrupp's steel division, recovering from six consecutive quarters in the red, is aiming to strengthen its competitiveness through restructuring, as part of an industrial concept that targets operational efficiency improvements.
- Amid ongoing turbulence in the European market, ThyssenKrupp's success in resolving wage agreements and proceeding with selling additional stakes in its steel business to investors like Daniel Kretinsky will be crucial for the company's financial projections and future business strategies.
