Rough Road for ThyssenKrupp's Steel Division: A Tale of Struggles and Recovery
Thyssenkrupp recoups profits - Persisting turmoil in steel division - Steel conglomerate Thyssenkrupp reports revenue surge, yet steel industry remains in turmoil
Steel magnate ThyssenKrupp has finally seen green after six consecutive quarters of losses. The uptick was primarily due to the sale of Thyssenkrupp Electrical Steel India, resulting in a post-tax profit of around 270 million euros[1]. However, their steel division, Steel Europe, is still battling headwinds.
In the second quarter, Steel Europe plunged into the red, incurring a loss of 23 million euros, significantly lower than the 68 million euros profit the division enjoyed in the same quarter last year[1]. This decline was due to lower production utilization and weaker earnings[1]. The division's revenue also took a hit, falling to 8.6 billion euros, compared to 9.1 billion euros the previous year[1].
Understanding the gravity of the situation, ThyssenKrupp has been spearheading a long-term restructuring of its steel division. Last year, they announced plans to cut or outsource up to 11,000 jobs as part of this overhaul. However, negotiations with the IG Metall trade union have resulted in a preliminary agreement that could potentially stall layoffs[2]. This agreement is meant to pave the way for a new collective bargaining agreement by summer 2025, based on ThyssenKrupp's industrial concept[2].
Meanwhile, Czech billionaire Daniel Kretinsky holds a 20% stake in ThyssenKrupp's steel business and is contemplating increasing it to 50%[2]. Additionally, the company is considering exiting its materials trading business, valuing it up to €2 billion[2].
Despite the challenges, ThyssenKrupp remains optimistic, with CEO Miguel López expressing confidence in a more stable market environment during the second half of the year, along with positive effects from the measures they've taken[1]. The company continues to hold its full-year outlook, expecting an operating profit of between 100 million and 500 million euros[1].
- ThyssenKrupp
- Steel Division
- Job Cuts
- Czech Billionaire Investment
- Restructuring
- Market Stability
- Financial Performance
In the midst of the restructuring of ThyssenKrupp's steel division, the company is exploring the potential investment from Czech billionaire, Daniel Kretinsky, who currently holds a 20% stake and aims to increase it to 50%. Despite the ongoing job cuts and Financial Performance challenges faced by the Steel Division, ThyssenKrupp remains optimistic about market stability and the positive effects from their measures, maintaining their full-year outlook with an expected operating profit between 100 million and 500 million euros. Additionally, the company may consider exiting its materials trading business, which could be valued up to €2 billion, as part of their long-term policy to streamline operations and enhance profitability, aligning with the vocational training they provide to their workforce, preparing them for roles in various industries.
