German industrial giant Thyssenkrupp downgraded its sales and profit outlook for the fiscal year, marking the second time in a few months. This comes after the company reported a second-quarter loss due to asset write-downs and carbon emission offset contracts.
Thyssenkrupp joins other steelmakers like Salzgitter in reducing targets this month, citing weak demand and falling prices in Europe. The company blames high energy costs, sluggish economic growth, and competition from imports for the challenging environment.
Thyssenkrupp now expects a net loss in the millions for the year ending September, compared to their previous forecast of breaking even. Sales are also projected to fall below the previous year’s level. The company’s stock price dropped after the announcement but partially recovered later.
This lowered guidance follows asset impairments and the impact of carbon emission contracts. Thyssenkrupp had already cut its forecasts earlier this year and warned of a challenging year due to volatile prices.
The company recently agreed to sell a portion of its steel business and announced job cuts and production reductions. Their steel unit suffered from declining orders, sales, and prices. Their materials services business also saw a drop in volumes and prices.
Despite the losses, Thyssenkrupp maintains its full-year forecast for adjusted earnings before interest and taxes and free cash flow.
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