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Published on 12/05/2020 2:14:25 PM | Source: Reuters

Thyssenkrupp warns of massive third-quarter loss as COVID-19 adds to pain

Posted in Top Stories| #World Market #Thyssenkrupp #COVID-19

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By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Germany  - German conglomerate Thyssenkrupp  on Tuesday warned its operating loss could swell to 1 billion euros ($1.1 billion) in the current quarter citing the coronavirus pandemic.

The group, whose operations range from steel to submarines, said the April-June quarter would likely be the trough in its fiscal year to September 30, while larger peer Siemens last week said it could last for 6-9 months.

"The full impact of the crisis on our businesses is not yet foreseeable. But it is already clear that the economic disruptions will leave very deep marks," CEO Martina Merz said.

Thyssenkrupp said it had secured a 1 billion euro credit line from German state-owned bank KfW [KFW.UL] to tide it over until it gets the money from the sale of its elevator division, which it expects to happen by the end of September.

Shares in the company were indicated to open 3.6% lower in pre-market trade.

"Disastrous as feared," a local trader said. "Very dangerous situation that must be analysed in more detail."

The group said its second-quarter net loss more than quintupled to 948 million euros ($1.02 billion) as the pandemic hit all business lines, most notably steel and automotive.

Carmakers and their suppliers, which represent the company's largest client group, have been forced to shut down plants around the globe.

Thyssenkrupp is planning to shut down or sell assets to stop cash outflow. It said it had received indicative offers for its Plant Technology division, which makes fertiliser and chemical factories.

(Reporting by Christoph Steitz; editing by Michelle Martin and Jason Neely)