Shares of Germany’s Thyssenkrupp surged by 7.5% in early trading on Tuesday following the company’s announcement of a narrowed net loss and a significant impairment charge for its struggling steel division, CNBC reports.
For the fiscal year ending September 30, Thyssenkrupp reported a net loss of 1.5 billion euros after minority interest, an improvement from the previous year’s loss of 2 billion euros. The company attributed the loss primarily to asset impairments amounting to approximately 1.2 billion euros, with 1 billion euros related to its Steel Europe division.
Thyssenkrupp posted adjusted earnings before interest and taxes (EBIT) of 151 million euros for the fourth quarter, exceeding analysts’ expectations of 120 million euros, according to Reuters. Despite the overall loss, the company’s results showed signs of improvement, particularly in the final quarter of the fiscal year.
CEO Miguel Lopez noted that the current fiscal year would be pivotal for the company, highlighting key decisions, particularly regarding the Steel Europe division and the Marine Systems business. Thyssenkrupp is restructuring its Steel Europe division, which includes discussions to form a 50:50 joint venture with Czech billionaire Daniel Krentisky. In the summer, Thyssenkrupp sold a 20% stake in the division to Krentisky’s EP Corporate Group (EPCG).
In addition to the restructuring of its steel operations, Thyssenkrupp is also considering the sale of its Marine Systems division, with ongoing negotiations with the German government regarding potential state involvement.
Thyssenkrupp’s restructuring efforts come amid broader economic challenges in Germany, where business activity fell to a seven-month low in September, and the country faces weakened demand for industrial goods both domestically and globally. Thyssenkrupp’s statement emphasized the difficulties Germany continues to face in its recovery, particularly as an export-dependent economy grapples with subdued global demand and weak consumer spending.
