Bloomberg reported that ThyssenKrupp AG forecast significantly negative earnings in Brazil and the US following project delays and cost overruns.
Mr Heinrich Hiesinger CEO said at the company’s annual general meeting in Bochum that the Steel Americas division has technical problems that are yet to be resolved, weighing on first half profit this fiscal year, while results may improve in the second half.
Delays at ThyssenKrupp's CSA steel slabs plant in Rio de Janeiro state contributed to impairment charges of EUR 2.9 billion in the last fiscal year, when it reported a loss. Rising raw material costs and falling steel use have hobbled producers' efforts to emerge from the industry's worst slump in 60 years after the recession eroded demand.
He said that "Our customers continued to draw down inventories, slowing Thyssenkrupp's shipments and depressing prices. First quarter earnings before interest and tax will be significantly lower than a year earlier, even with signs that European spot prices are starting to recover."
Hiesinger said that every ThyssenKrupp business is reviewed every year. He added that "On the basis of this evaluation we will then decide."
Mr Hiesinger said that "The Americas market has great prospects. While the Steel Americas' new coke mill is scheduled to ramp up in the fourth quarter, it won't operate at an optimum cost structure. Expenses at Steel Americas are likely to fall in the second half."
ThyssenKrupp started its CSA Brazilian plant in 2010. The company controls 73.1% of the venture, and Rio based Vale owns the rest. ThyssenKrupp's steel mill in Alabama also opened that year.
Sourced from bloomberg.net
×
