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ThyssenKrupp slips further in the red

February 14, 2012

Germany's largest steelmaker has booked a huge loss in the first financial quarter of this year. A global slump in steel demand has weighed heavily on ThyssenKrupp's performance.

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German industrial heavyweight ThyssenKrupp has reported a net loss of 460 million euros ($605 million) in the financial quarter from September through December 2011. The loss contrasts sharply with a net profit of 142 million euros a year earlier.

Sales slipped 1.2 percent to 9.9 billion euros, while orders were little changed at 10.8 billion euros, the company said in a statement Tuesday.

ThyssenKrupp - Germany's largest steel manufacturer - attributed the declining volume in its materials business to "cautious customers" and "uncertainty caused by the sovereign debt crisis."

Demand in its technologies division was "largely favorable, with strong increases in orders and sales in the elevator and automotive component businesses," the company said.

The news, however, disappointed industry analysts.

"The company clearly fell short of market expectations, which had been expecting positive earnings," Christian Schmidt, an analyst at Helaba bank, told the Reuters news agency.

Need for restructuring

After selling its non-military shipbuilding activities in December, ThyssenKrupp merged its stainless steel unit Inoxum with Finland's Outokumpu.

The disinvestments were part of the group's drive to restructure its portfolio away from a strong dependency on materials and toward more profitable sectors such as elevators, submarines and car parts.

The Inoxum deal, which earned ThyssenKrupp 2.7 billion euros, was not yet included in first-quarter figures, the company said.

In view of the latest figures, ThyssenKrupp shares came under pressure, selling 4.5 percent lower in early trading at the Frankfurt Stock Exchange on Tuesday.

uh/cmk (Reuters, dpa AFP)

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