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ThyssenKrupp slips into US$2.8b loss
By George Frey |
November 28, 2009, Saturday
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Print Edition
Print Edition
GERMAN steel maker ThyssenKrupp AG reported a loss of 1.87 billion euros (US$2.8 billion) for the 2008-2009 fiscal year and announced plans yesterday to cut 5,000 jobs and sell divisions employing another 15,000 people.
The loss for the fiscal year that ended September 30 compared with a net profit of 2.3 billion euros the previous year for ThyssenKrupp, based in Duesseldorf.
The company said the drop was due to a number of restructuring charges and the impact of the global economic downturn on the steel industry. At the same time, the firm faced construction costs for building up businesses in Alabama in the United States and Brazil.
Revenue fell 24 percent to 40.5 billion euros from 53.4 billion euros in the previous fiscal year. Order intake fell to 36 billion euros from 55 billion euros in the 2007-2008 fiscal year -- a 35-percent decline.
The company did not immediately release fourth-quarter figures.
Chief Executive Ekkehard Schulz told reporters the company expected to cut about 5,000 jobs and the rest of the payroll reductions would be made through divestment of units. He didn't specify what the company planned on selling off.
Last week, the company said it was selling industrial services unit North American Safway Group to Odyssey Investment Partners LLC, a private equity company based in New York.
Safway, based in Waukesha, Wisconsin and Fort Saskatchewan, Alberta, has businesses, including scaffolding. It had sales of more than US$700 million in 2008 and a work force of about 5,000 across the US and Canada.
In overall terms, ThyssenKrupp said it expected only a slow recovery for this fiscal year.
In a letter to shareholders, Schulz said "our customers are placing more orders, even if a return to the level of the good years is still some time away."
"Now that the world economy seems to have passed the worst of the recession, the new fiscal year 2009-2010 will be characterized by at best slow economic recovery," the company said in the report.
"As a result, there will be only moderate growth in order intake and sales," it added. "The group's new organizational structure will make us leaner and more efficient. Together with the optimization programs we have introduced, this will have a positive effect on earnings."
The loss for the fiscal year that ended September 30 compared with a net profit of 2.3 billion euros the previous year for ThyssenKrupp, based in Duesseldorf.
The company said the drop was due to a number of restructuring charges and the impact of the global economic downturn on the steel industry. At the same time, the firm faced construction costs for building up businesses in Alabama in the United States and Brazil.
Revenue fell 24 percent to 40.5 billion euros from 53.4 billion euros in the previous fiscal year. Order intake fell to 36 billion euros from 55 billion euros in the 2007-2008 fiscal year -- a 35-percent decline.
The company did not immediately release fourth-quarter figures.
Chief Executive Ekkehard Schulz told reporters the company expected to cut about 5,000 jobs and the rest of the payroll reductions would be made through divestment of units. He didn't specify what the company planned on selling off.
Last week, the company said it was selling industrial services unit North American Safway Group to Odyssey Investment Partners LLC, a private equity company based in New York.
Safway, based in Waukesha, Wisconsin and Fort Saskatchewan, Alberta, has businesses, including scaffolding. It had sales of more than US$700 million in 2008 and a work force of about 5,000 across the US and Canada.
In overall terms, ThyssenKrupp said it expected only a slow recovery for this fiscal year.
In a letter to shareholders, Schulz said "our customers are placing more orders, even if a return to the level of the good years is still some time away."
"Now that the world economy seems to have passed the worst of the recession, the new fiscal year 2009-2010 will be characterized by at best slow economic recovery," the company said in the report.
"As a result, there will be only moderate growth in order intake and sales," it added. "The group's new organizational structure will make us leaner and more efficient. Together with the optimization programs we have introduced, this will have a positive effect on earnings."
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