New fall for the German steel group. On Tuesday, November 19, thyssenkrupp announced a new depreciation of 1 billion euros on its steel division. The Essen group cites the deterioration of the sector’s outlook as well as the future investments necessary for the decarbonization of production. For the record, its factory in Duisburg, Germany – the largest steelworks in Europe – alone emits around 2.5% of German CO2 emissions.
This depreciation, the group’s second in two years, comes as discussions with Czech billionaire Daniel Kretinsky, who already owns 20% of the steel division, continue for a possible stake increased to half the capital. “If the 50:50 joint venture does not materialize, we have agreed a mutual termination right with EPCG for the 20 percent stake that has already been sold,” Thyssenkrupp emphasized in its annual report.
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The German group is experiencing “significantly weaker” demand in the automotive industry, engineering and construction, leading to a loss of 1.5 billion euros after 2 billion in the previous financial year. On the steel side, turnover collapsed by 18%, falling to 10.7 billion euros, weighed down by rising energy costs in Germany and competing with metal from China.
A rare financial clearing, free cash flow before mergers and acquisitions unexpectedly reached positive territory, at 110 million euros, notably with advance payments from customers of its Marine Systems division. Thyssenkrupp, however, anticipated a free cash flow loss before mergers and acquisitions of around 100 million euros.
With Reuters (Reporting Christoph Steitz; French version Etienne Breban; editing by Augustin Turpin)
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