November 17, 2009

Germany’s largest steel maker ThyssenKrupp AG posts big annual loss

FRANKFURT

Germany’s biggest steel maker, ThyssenKrupp AG, said Nov. 13 it will report a pretax loss of 2.4 billion euros (US$3.6 billion) for the 2008-2009 fiscal year due to a number of one-time charges and as the global downturn hurt demand from industry.

ThyssenKrupp, based in Duesseldorf, had a pretax profit of 3.1 billion euros in the previous fiscal year.

It said Friday that revenue declined to 41 billion euros from 53 billion euros the previous year.

The company is scheduled to report earnings for its full fiscal year — which begins in October — on Nov. 27.

It did not immediately provide net income figures. In the 2007-2008 fiscal year, the company reported net income of 86 million euros.

Thyssen said its fourth quarter pretax loss amounted to 1.4 billion euros on sales of nearly 10 billion euros, but did not provide comparable figures.

The company said the 2008-2009 fiscal year was the most difficult in its history, and that the economic downturn hit almost all markets.

It took a number of impairment charges, totalling some two billion euros for the year, including measures to scale back production to preserve jobs.

At the same time, it faced construction costs for building up businesses in Alabama and Brazil.

Looking ahead, it predicted some improvement for the next fiscal year, but said the emerging economic recovery remained fragile.

“We anticipate that sales will stabilize in fiscal 2009-2010,” Ekkehard Schulz, the company’s chief executive, said in the report. “Earnings are expected to improve significantly and return to profit, thanks in no small part to the cost-cutting programs we have introduced.”

Thyssen said it expects European steel volumes to improve but revenue to decline.

The stainless steel division is predicted to see a stabilization in volumes and prices, while a strong order backlog in Thyssen’s elevator business is expected to contribute to earnings.

The Americas steel business will most likely see a pretax loss in 2009-2010, in the three-digit million euro range, Thyssen said.

The loss partly stems from charges on steel production plant projects in Alabama and Brazil.

Associated Press

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