Frankfurt (Germany) (AFP) – Thyssenkrupp’s shares slumped Thursday as the struggling German industrial giant slashed its sales forecasts due to weak demand amid US President Donald Trump’s tariff onslaught. The group, whose products range from steel to car parts and submarines, said it now expects sales to fall by five to seven percent in the current fiscal year. This compared to a previous forecast of a drop of up to three percent. Thyssenkrupp’s shares plunged seven percent on the Frankfurt Stock Exchange following the announcement.
The group has long been struggling, particularly as its traditional steel business faces competition from Asia, but the turmoil triggered by Trump’s tariffs have worsened its problems. “The past quarter was characterised by enormous macroeconomic uncertainty,” said Thyssenkrupp CEO Miguel Lopez. “We are very much feeling the weak market environment in key customer industries such as the automotive, engineering and construction industries.”
The firm, one of Germany’s best-known industrial groups that traces its history back to the 19th century, also posted a hefty net loss for the April-to-June period of 278 million euros ($325 million) — five times greater than a year ago. The results were hit by an impairment in the troubled steel division as well as restructuring costs at its auto unit. The company also gave a more cautious forecast for operating profits for the current fiscal year, which runs to the end of September. The firm expects them to be in the lower end of a previously announced range of 600 million to one billion euros.
On a brighter note, its unit that makes submarines and warships reported a jump in sales and orders, driven by a boom in the defence sector triggered by the Ukraine war. Thyssenkrupp shareholders voted last week in favour of spinning off the division so it can benefit more from growing demand. It is part of a broader overhaul to split the entire group into a series of standalone businesses, but the plan has fuelled fears of further job cuts at the historic conglomerate.
© 2024 AFP
