German engineering giant ThyssenKrupp has reported a steep drop in net earnings for the first half of its business year. The firm said the ailing steel business contributed to the development in no small way.
ThyssenKrupp reported Tuesday its bottom-line earnings dipped by 62 percent in the first half of its business year that ended in September. Net profit amounted to 37 million euros ($42.1 million), the Essen-based company said.
Revenue dropped by 8 percent to total 19.4 billion euros, with a slight recovery of advanced material prices coming too late to boost ThyssenKrupp 's operations in the first six months of the fiscal year.
Executives said the drop in earnings was above all a result of a protracted crisis in the steel industry worldwide.
Like market leader ArcelorMittal, ThyssenKrupp had to grapple with cheap steel imports from China and considerable overcapacities weighing on prices in the sector.
CEO Heinrich Hiesinger lowered ThyssenKrupp's operating profit outlook for the full business year to 1.4 billion euros, down from the previous forecast of 1.6 to 1.9 billion euros, and also down from the 1.68 billion euros achieved in the previous business year.
Hiesinger had earlier come out in favor of consolidating the steel sector in Europe, with 90,000 employees in Germany and 300,000 across the Continent.
Media reports had quoted insiders as saying that ThyssenKrupp was mulling a tie-up with Tata Steel Europe.
While the problems in the steel sector keep hunting the German company, it reported a marked improvement in results for its flourishing elevator products business.
hg/cjc (Reuters, dpa)