German heavy industry giant ThyssenKrupp says it is not satisfied with the company's current earnings. Among others things, the company attributed the first-quarter results to soft demand and downward pressure on prices.
German heavy engineering firm ThyssenKrupp, whose business year runs from September to October, reported on Tuesday that first-quarter net profits from day-to-day operations dropped by 29 percent.
Q1 earnings before interest and tax (EBIT) fell by 14 percent to 219 million euros ($389.5 million).
"We cannot be satisfied with the group's current earning power," CEO Heinrich Hiesinger said.
ThyssenKrupp said the steel division was being hit by falling demand and price pressures on global markets. The company also produces elevators, industrial plant technology, submarines and car parts, with most of those sectors logging stronger business in the first quarter.
With revenues decreasing by eight percent in the period between October and December, the company's outlook for the whole of the year remained cautious.
"Our business performance in the 2012/2013 fiscal year will be characterized to a very large extent by the continued absence of a global economic recovery, with an unresolved debt crisis in particular in the eurozone and slower growth in the emerging economies," ThyssenKrupp said in a statement.
Last week, the firm unveiled plans to axe more than seven percent of its Steel Europe division workforce of 27,600. It said the layoffs would be part of the company's 500-million-euro cost-cutting drive.
hg/pfd (AFP, Reuters)