German conglomerate Thyssenkrupp has cut its annual forecasts for sales and net profit for the second time in three months, citing lower demand and prices at its steel unit and impairments at its materials trading division. The company’s shares fell by 5.7% in morning trading following the downgraded outlook.
The scaled-back guidance underscores the challenging environment for companies focused on capital goods, which need to tackle elevated inflation, raw materials price swings, and cooling global demand. This includes cheap Asian steel imports that have been a key driver behind Thyssenkrupp’s efforts to win Czech billionaire Daniel Kretinsky as a co-owner of its steel division, Germany’s largest, in the hopes of making the business more competitive.
Thyssenkrupp is in talks with Brussels about tightening import conditions to support the local steel sector, CEO Miguel Lopez said, amid a cloudy global environment in which tariffs have become more frequent. Lopez highlighted the “gloomy market environment” but noted that the company had made progress with its turnaround since the start of the year, including steps to spin off its marine divisions, which may be sold to private equity firm Carlyle.
Thyssenkrupp now expects an annual net loss in the low triple-digit millions of euros for the fiscal year to September, having previously forecast breaking even. According to LSEG data, analysts on average expected a net profit of 203 million euros ($220 million) in the year to September. The company had already cut its outlook when it released first-quarter results in February.
The weakening demand led to impairments at Thyssenkrupp’s materials trading division, and additional headwinds came from lower-than-expected quarterly results at Thyssenkrupp Nucera, in which Thyssenkrupp owns a majority, with the shares trading 8% lower.