Thyssenkrupp’s steel businesses lift volumes, slash profit

Thyssenkrupp Steel Europe reported an increase in deliveries, but a decline in revenue and profit, on account of lower sales prices, in its third fiscal quarter through June.

The steelmaking division of thyssenkrupp AG increased its order intake by 4% year-on-year to €3.2 billion ($3.5 billion) due to “significantly higher order volumes”, especially from the automotive industry (see Kallanish 11 August).

Despite the increase in shipment volumes, revenue was 9% below the prior-year quarter at €3.3 billion. Lower spot market prices left their mark, but a stabilising effect came from the company’s big share of long-term contracts. Shipments came to 2.6 million tonnes, mainly due to higher order call-offs from the automotive industry and increased deliveries to trading and steel service centres, tk notes.

Due to lower earnings compared with the prior-year quarter, adjusted Ebit amounted to €190 million after €376m a year earlier. Lower raw material and energy costs, along with internal restructuring, had an alleviating effect, tk says.

Meanwhile, Materials Services, thyssenkrupp AG’s steel and metals distribution division, saw order intake of €3.3 billion, down from €4.1 billion in the prior-year period, due to lower prices, “as was expected”, the firm says.

Volumes of steel and other materials shipped remained constant overall, at around 2.3mt, but revenue dropped to €3.3 billion from €4.8 billion. Despite the pressure on margins as a result of price erosion, tk points out that Materials Services still posted adjusted Ebit of €50m – which was nevertheless significantly below the prior-year record of €386m.

It notes that the division’s direct-to-customer business was up, while warehouse and distribution volumes decreased.

Christian Koehl Germany