Global giant takes $25 billion writedown

Global giant takes $25 billion writedown

German company ThyssenKrupp on Wednesday revealed a massive write-down of 2.1 billion euros – 25 billion kroner – for its steel division, due to what it describes as a bleak future, Reuters reported. Reuters.

ThyssenKrupp has been trying to sell its steel business for several years, and the delisting underscores the challenge of including Czech energy company EPH as a co-owner of the company.

As a result of the write-down, the company recorded a net loss of €2 billion for the fourth quarter. Adjusted operating profit in the July-September quarter fell 45 percent to 88 million euros.

Shares fell 1.8 percent in premarket trading, but are now up 6.9 percent.

Chinese headache

ThyssenKrupp itself says it is in constructive talks with EPH about possible cooperation. EPH is controlled by Czech billionaire Daniel Kretinski, and will support ThyssenKrupp Steel Europe with its energy expertise in a potential collaboration, according to the company.

ThyssenKrupp warned last month of a significant deterioration in the steel market, adding that optimistic assumptions had been tempered by a combination of economic weakness in Germany and other markets, as well as rising raw material and energy costs, Reuters wrote.

Cheap Chinese steel imports to Europe are causing more trouble, as Asian competitors do not have to bear the costs of carbon dioxide emissions, putting local players at a disadvantage.

Global production of crude steel reached 150 million tons in October 2023, an increase of 0.6 percent over the same month of the previous year, according to the World Steel Federation.

Steel production in China reached 79.1 million tons, down 1.8 percent compared to the same month last year. India produced 12.1 million tons, an increase of 15.1 percent year-on-year, while Japan produced 7.5 million tons, an increase of 2.5 percent year-on-year.

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Dalila Awolowo

Dalila Awolowo

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