The unit has suffered from rocky economic conditions, fierce competition from Asian manufacturers, and a pressure to decarbonise.
Thyssenkrupp has downgraded the value of its steel business by a further €1bn, blaming weak earnings expectations and the costly process of going green.
The German industrial firm announced a yearly net loss of €1.4bn, mainly attributable to the write-down, which was lower than last year’s loss of €2bn.
The devaluation marks the conglomerate’s second asset impairment in two years, after its steel unit dropped €2.1bn in value last November.
“In respect of our main strategic issues, the current fiscal year will be a year of decisions – especially for Steel Europe and Marine Systems,” CEO Miguel Lopez said in a statement on Tuesday.
Thyssenkrupp is notably engaged in talks with Czech billionaire Daniel Křetínský, who owns 20% of the firm’s steel division. It remains to be seen whether this stake will be raised by 30%.
Germany’s largest steel maker has been struggling for years due to higher energy costs, competition from cheaper Asian rivals, and pressure to go green.
Decarbonisation requires significant investment and the price of this transition has sparked internal disagreements.
Bernhard Osburg, the CEO of Thyssenkrupp’s steel unit, decided to leave the company earlier this year, along with Sigmar Gabriel, head of the supervisory board.
Two other executives at the steel unit and three individuals on the supervisory board also resigned.
Behind the shock departures were disagreements over restructuring, the green transition, and takeover negotiations with Křetínský.
One concern is that the steel unit will be spun off from the main company with insufficient resources.
“The fear is that we will be given as little dowry as possible, so that at the end of the day the insolvency administrator will be at our door,” said Ali Güzel, chairman of the Works Council at the ThyssenKrupp Duisburg/Beeckerwerth site, in August.
In light of rocky economic conditions, Thyssenkrupp is also trying to sell off its submarine subsidiary, Thyssenkrupp Marine Systems.
After US private equity group Carlyle dropped its offer for the unit last month, Thyssenkrupp is planning an IPO for the naval shipbuilding unit division.
Tuesday’s earnings statement was largely disappointing, although there were some brighter indicators for the firm.
ADVERTISEMENTAdjusted EBIT (earnings before interest and taxes) is predicted to be between €600m and €1bn this year, up from the €567m recorded in the year just past.
Thyssenkrupp shares were up around 6% on Tuesday morning in daily trading.
Source: Euro News
