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Impact of War

Higher prices boost Thyssenkrupp’s quarter and outlook

The improvement was driven by "considerable increases in market prices" for products from its materials and steel divisions, Thyssenkrupp CEO Martina Merz said in a statement.

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FRANKFURT: MAY. 11 – German industrial heavyweight Thyssenkrupp said Wednesday it would raise its full-year outlook as increasing prices for its products buoyed its second-quarter result.

The conglomerate, which runs its business year from October to September, turned a net profit of 565 million euros ($596 million) in the second quarter, compared with a loss of 211 million euros in the same period last year.

In the period for January through March, the Essen-based group also saw sales increase to 10.6 billion euros, up from 8.6 billion euros in 2021.

The improvement was driven by “considerable increases in market prices” for products from its materials and steel divisions, Thyssenkrupp CEO Martina Merz said in a statement.

The positive boost outweighed the drag from “increasing materials, logistics and energy costs and the worsening supply chain problems”, the group said, issues which have become aggravated following the Russian invasion of Ukraine.

These impacts were felt most in Thyssenkrupp’s “automotive and components-related businesses”, whose other activities range from steel and industrial plants to submarines.

Following the improved quarterly result, Thyssenkrupp raised its full-year outlook, projecting a “low double-digit percentage” increase in sales, having previously expected a figure in the “mid-single-digit” range.

The group’s operating result, a measure of underlying profitability, was expected to come in above two billion euros, up from a previous estimate of 1.5 million euros to 1.8 million euros. Its net profits were, however, expected to remain around one billion euros.

The revised outlook was based on the assumption that fuels, including natural gas, and raw materials “continue to be available without restriction”, while their prices did not increase further.

The cost of each has been driven up by the war in Ukraine, with the European Union currently in discussions over an embargo of Russian oil.

Germany, like many of its European neighbours, is highly reliant on energy imports from Russia, particularly for gas. “We are analysing precisely how the geopolitical changes may change supply and value chains in the medium and long term,” Merz said.

-AFP

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