Thyssenkrupp swings to annual loss after €2.1bn steel write-down

(Sharecast News) - Shares in Thyssenkrupp surged in Frankfurt on Wednesday despite the German engineering giant taking a huge €2.1bn write-down on the value of its steel division, as it booked its first ever positive annual free cash flow before mergers and acquisitions. The company reported a net loss of €2.0bn in its fiscal year ending 30 September, compared to a net profit of €1.2bn the year before, as a result of the impairment of Steel Europe.

"These resulted from the higher cost of capital and the implications of the increasingly gloomy earnings expectations for the short, medium and long terms against the backdrop of the economic situation and the structural changes specific to the steel industry," the company said in a statement.

Order intake was down at €37.1bn during the year, from €44.3bn previously, due to a substantial reduction in material prices at Materials Services and a major order at Marine Systems posted in the previous year. Adjusted earnings before interest and tax fell to €703m from €2.06bn.

Nevertheless, free cash flow before M&A improved to positive €363m, from a negative €476m the year before.

Looking ahead, the company expected to book adjusted EBIT in the "high three-digit million euro range"; net profits should be in the "low to mid three-digit million euro range"; while free cash flow before M&A is guided to being in the "low three-digit million euro range".

The stock was up nearly 7% at €7.06 by 1214 CET.