Thyssenkrupp distribution profit falls as prices normalise
Despite tonnages rising slightly year-on-year, thyssenkrupp Materials Services saw second-fiscal-quarter-through-March earnings drop due to normalised steel prices, Kallanish hears from the company.
Order intake came to €3.9 billion ($4.2 billion), down from the record prior-year figure of €4.5 billion; revenue was virtually identical in both periods. The drop was even more obvious for earnings, with adjusted Ebit reaching €85 million, after €336m a year earlier. The primary reason for this decline was falling margins as a result of lower material prices, it notes, pointing out that the prior-year period saw exceptional heights.
The development was particularly evident in the trading and European service centre business and direct-to-customer business. The North American units posted a slight increase in sales in both warehousing and automotive-related service centres. Tk Materials Services, one of Europe’s largest steel distributors that operates largely independent from thyssenkrupp’s mill unit tk Steel, also benefited from positive dollar exchange rate effects.
Volumes of steel, other materials and raw materials rose 2% overall to 2.34 million tonnes, mainly due to increased volumes in direct-to-customer business. Although sales prices were below the prior year overall, the company reports a slight recovery in the price of finished steel quarter-on-quarter, and improving demand.
In the half-year period from October through March, order intake at the unit fell by 12% to €7.25 billion, and revenue by 8% to €7.14 billion, with adjusted Ebit dropping from €555m to €105m.
Christian Koehl Germany