Thyssenkrupp profits fall on lower prices for materials

Source: Reuters

German industrial giant Thyssenkrupp on Tuesday said falling prices for materials had dragged down profits in the first quarter, as it warned of an "uncertain" economic environment ahead.

The steel-to-submarines group, which runs its business year from October to September, booked a net profit of 75 million euros ($80 million), compared with 106 million euros a year earlier.

The company said the "anticipated normalisation of prices" had led to "lower material prices" that hit its key materials services business especially hard.

Although steel prices have also come down as global economic activity weakens, the group's Steel Europe unit was less affected thanks to long-term contracts with customers.

The impact of a major overhaul at the steel unit had also boosted earnings, the group said.

Thyssenkrupp said overall group sales were stable year-on-year at nine billion euros.

"Despite the continuing uncertain environment, the first-quarter results are robust," chief financial officer Klaus Keysberg said in a statement.

The company's ongoing restructuring programme had helped make the group more adaptable to new challenges, he added.

As part of the cost-cutting drive, the Essen-based group has already shed more than 10,000 jobs out of a planned 13,000 worldwide.

Thyssenkrupp said it was on track to reach its 2022-2023 targets, expecting adjusted operating profits in the "mid to high three-digit million euro range".