Thyssenkrupp swings to second quarter loss after scrapping Tata merger deal
German steel conglomerate Thyssenkrupp posted a second quarter loss this morning, days after it was forced to ditch plans for a merger with India’s Tata Steel.
Read more: EU scuppers Thyssenkrupp's European steel merger
The figures
The firm said it made a net loss attributable to shareholders of €99m (£85.9m) in the three months to 21 March, compared to a €240m profit in the same period last year.
Sales were up two per cent to €10.6bn, narrowly missing €10.7bn estimates, while operating profit plummeted 66 per cent to €145m.
Operating cash flow was €319m, down on €419m last year.
Why it’s interesting
Thyssenkrupp, which supplies parts to the car industry, blamed the results on Germany’s “economic slowdown, especially in the automotive sector”.
The firm said last week it would not be making a net profit this year, which was partly down to costs associated with “the reintegration of the steel business”. This comes after the EU last week said it would not approve Thyssenkrupp’s proposed merger with Tata Steel.
Shares were down 0.6 per cent today after a 28 per cent rise on Friday. This was caused by the merger announcement, as well as the abandonment of a plan to split the company in two. Instead of doing this, Thyssenkrupp will now cut 6,000 jobs and list its lifts business, which is performing better than the rest of the firm.
What Thyssenkrupp said
“Of course, with steel, we are looking to see what other consolidation options there are,” chief exec Guido Kerkhoff told the Handelsblatt business daily.
Read more: Thyssenkrupp shares soar as it abandons plans to split company
“But with the current position of the European Commission, I don’t see the possibility of bigger mergers. As a result, we will remain the majority shareholder.”