Market Analysis

German conglomerate Thyssenkrupp (TKAG.DE) has revised its sales and net profit forecasts for the 2023/24 period for the second time in three months. The adjustment is attributed to reduced demand and prices in its steel unit, along with impairments in its materials trading division. This reflects the ongoing challenges faced by conglomerates in the capital goods sector, who grapple with inflation, fluctuations in raw material prices, and a global downturn in demand for their products.

CEO Miguel Lopez emphasized the difficult market conditions, noting the progress made in the company's turnaround efforts since the beginning of the year. He specifically highlighted initiatives to divest its steel and marine divisions. Thyssenkrupp, known for its production of steel, submarines, and automotive components, now anticipates a net loss in the low triple-digit millions of euros for the fiscal year, contrary to its previous expectation of breaking even.

According to data from LSEG, analysts project an average net profit of 203 million euros ($220 million) for the year ending in September. The company had already revised its outlook downward when it reported its first-quarter results in February.

A Frankfurt-based equity trader described the latest report as "sobering," anticipating negative implications for the company's shares, which have already declined by more than twenty percent year-to-date. Thyssenkrupp attributed the impairments in its materials trading division to weakened demand but did not disclose the specific amount.

Paraphrasing text from "Reuters" all rights reserved by the original author.