By Christoph Steitz and Tom Käckenhoff
FRANKFURT (Reuters) – German conglomerate Thyssenkrupp cut its annual forecasts for sales and net profit for the second time in three months, blaming lower demand and prices at its steel unit as well as impairments at its materials trading division.
Frankfurt-listed shares in the company were down 4.2% at 0626 GMT following its downgraded guidance, which a local trader said was “sobering”.
The outlook cut underscores the challenging environment for conglomerates focused on capital goods, which need to tackle elevated inflation, raw materials price swings and cooling global demand for their products.
Highlighting a “gloomy market environment”, CEO Miguel Lopez said the company had made progress with its turnaround since the start of the year, singling out steps to sell or spin off its steel and marine divisions.
Thyssenkrupp, which makes submarines, car parts and bearings for the wind industry, now expects an annual net loss in the low triple-digit millions of euros for the fiscal year to September, it said on Wednesday, having previously forecast break-even.
According to LSEG data, analysts on average expect a net profit of 203 million euros ($220 million) in the year to September. The company had already cut its outlook when it released first-quarter results in February.
Weakening demand led to impairments at Thyssenkrupp’s materials trading division, the company said, without specifying the amount.
Additional headwinds came from lower-than-expected quarterly results at Thyssenkrupp Nucera, in which Thyssenkrupp owns a majority. Frankfurt-listed shares in the maker of electrolysers were 4.5% lower.
($1 = 0.9245 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Mark Potter, Rachel More and Muralikumar Anantharaman)