Germany's Thyssenkrupp on Wednesday announced a €2.1 billion ($2.3 billion) impairment charge on its steel division due to "gloomy" prospects, highlighting the difficulty of trying to attract Czech energy group EPH as a co-owner of the business. .
Shares in the industrial conglomerate still rose 5% to top the Frankfurt mid-cap index as the group posted positive pre-M&A free cash flow for the first time in seven years, a key indicator for investors.
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As a result of the impairment, Thyssenkrupp, which has been trying to sell its steel division for several years, reported a net loss of 2 billion euros for the fourth quarter and adjusted operating profit fell 45% to 88 million euros.
“The numbers show that we have made progress in the transformation of Thyssenkrupp,” said Thyssenkrupp CEO Miguel Lopez, adding that the group’s APEX program aims to improve its performance.
The company has offered a stable dividend of 0.15 euros per share, said free cash flow before mergers and acquisitions was 363 million euros.
Thyssenkrupp, which in addition to steel makes submarines, car parts and operates a large materials trading business, said , which is in constructive and open discussions with EPH about a potential steel joint venture.
EPH, controlled by Czech billionaire Daniel Kretinsky, will support Thyssenkrupp Steel Europe with its energy expertise in any joint venture, Thyssenkrupp said.
Thyssenkrupp last month noted a marked deterioration in the steel market, adding that the optimistic outlook was clouded by a combination of economic weakness in Germany and other markets, as well as higher raw material and energy prices.
Importing cheap Chinese steel into Europe has become an additional headache, and the fact that Asian competitors do not have to bear the costs of CO2 emissions puts local players at a disadvantage.
