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Posts second-quarter net loss of 223 mln euros
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Steel business suffers heavy impairments
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Shares down 3.3%
(Releads on CEO comments, adds market reaction, context)
By Christoph Steitz and Tom Käckenhoff
FRANKFURT, May 11 (Reuters) - Thyssenkrupp's outgoing Chief Executive Martina Merz sought to assuage investor
fears that her exit would slow down the conglomerate's
turnaround efforts, as the German company swung to a net loss in
the second-quarter.
The submarines-to-car parts group has been criticised for
not making enough progress with plans to hive off its steel,
defence and hydrogen divisions, which are critical to turning
the industrial firm into more of a holding company.
Slow progress essentially cost Merz her job, sources have
told Reuters and investors have expressed concern her departure
may further hinder restructuring efforts.
She will leave at the end of the month after less than four
years in the job and is expected to be replaced by Norma interim CEO Miguel Angel Lopez Borrego in June.
Merz, during her final quarterly results presentation, said
she saw no indication that the change in leadership would delay
strategy execution, even saying she had "no doubt that the speed
may even increase".
The comments came after Thyssenkrupp increased its outlook
for free cash flow before mergers and acquisitions -- a key
gauge of the German conglomerate's financial health -- now
expecting it to turn positive for the first time in seven years.
Thyssenkrupp still posted a second-quarter net loss of 223
million euros ($245 million) from a year-ago profit of 565
million euros, after a rise in interest rates and cost of
capital led to 350 million euros in impairment losses at the
Steel Europe division.
Shares in the company were down 3.3%.
Steel Europe suffered an adjusted operating loss of 14
million euros in the quarter, down from a 479 million profit in
the same period last year, Thyssenkrupp said.
Adjusted EBIT declined by 74% to 205 million euros in the
second quarter, beating the 154 million consensus in a Vara poll
provided by the company. Analysts at JP Morgan, however, said
the second quarter "reads weak where it counts", citing the
quarterly loss at the steel division.
In a joint letter to shareholders, Merz and finance chief
Klaus Keysberg said options for the steel business included
"possible cross-sector and cross-border partnerships" and that
talks with potential partners were underway.
($1 = 0.9084 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by
Alexander Smith, Miranda Murray, David Goodman and Sharon
Singleton)
