German industrial giant Thyssenkrupp reported a massive annual loss Wednesday due to surging costs, as talks about a tie-up of its steel division with Czech billionaire Daniel Kretinsky’s energy company continue.
The group recorded a net loss of two billion euros ($2.2 billion) in the past fiscal year, compared to a net profit of 1.2 billion in the 2021-22 period.
The steel-to-submarines group, which runs its business year from October to September, struggled with rising energy costs, high interest rates and a sharp fall in the prices of certain goods, most notably steel.
Its steel division, Steel Europe, has been suffering in recent years, due to low prices and competition from Asian countries.
Over the year, the division’s operating profits fell 73 percent, while it took a 2.1 billion euro writedown on assets, Thyssenkrupp said in a statement.
“We must continue to work hard at raising the performance of our businesses,” the group’s CEO Miguel Lopez said in a statement.
However, he also stressed that there had been “progress with the transformation of Thyssenkrupp”.
As the green transition gathers pace, a major focus has been on shifting to the production of climate-neutral steel — produced without burning fossil fuels.
The group has received two billion euros in German state aid to fund a steel decarbonization project.
Thyssenkrupp has for several years been trying to spin off its steel business, as part of efforts to raise additional funding to drive decarbonization.
It has entered into talks with Kretinsky’s EPH energy company about a potential joint-venture in the steel business, which it described as “constructive and open-ended”.
“The specific form of a potential joint venture is the focus of the ongoing negotiations,” said the company in a statement.
The talks have raised concerns among employee representatives, who have criticized the lack of information and job guarantees linked to the plan.
Source: Macau Business
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