BERLIN – Germany’s Thyssenkrupp on Wednesday suspended its 2021/22 forecast for free cash flow before mergers and acquisitions for due to the Ukraine crisis and said it was unclear if it would still be able to spin off its steel division.
“Thyssenkrupp remains convinced that the independent positioning of the steel business offers very good prospects for the future. Nevertheless, a statement on the feasibility is at present not possible due to the current economic conditions,” it said.
Although the group’s sales in Russia and Ukraine are negligible at less than 1% of total sales, Thyssenkrupp said it expected business to be hit by the far-reaching macroeconomic and geopolitical consequences of the war in Ukraine.
Last month, Thyssenkrupp had said it expected free cash flow before M&A to break even for 2021/22.
“Against this background – in particular due to rising raw material prices – Thyssenkrupp AG suspends its forecast for free cash flow before M&A for fiscal year 2021/2022,” it said, adding the exact extent of consequences of the war were very uncertain.
Until the start of the war, business in the first and second quarter of the fiscal year were going according to plan, it said.
In February, Thyssenkrupp said it expected an adjusted EBIT between 1.5 billion euros and 1.8 billion euros and net income of at least 1 billion euros for 2021/22.
“In March, initial negative effects occurred primarily in the steel and automotive supply businesses,” it said, adding the board still expected adjusted EBIT for the second quarter to be above the previous quarter.
(Reporting by Madeline Chambers; Editing by Richard Chang)
