Steel Giant ThyssenKrupp: Out of the Red but Still Facing a Tough Battle
Thyssenkrupp reports earnings recovery - Steel sector continues to struggle - Steel titan Thyssenkrupp reports profits amidst ongoing industry struggle
Let's spill the beans on ThyssenKrupp's current financial standings. The industrial titan has broken the six-quarter streak of losses, primarily due to the sale of Thyssenkrupp Electrical Steel India, which contributed a post-tax profit of roughly 270 million euros.
Still, things ain't all peachy in the steel division. Despite ThyssenKrupp's affirmation of its forecast, expecting an operating profit between 600 and 1,000 million euros, the Q2 profit was a measly 19 million euros – a far cry from the 184 million euros in the same period last year. Weak earnings and reduced production capacity utilization are the culprits, with revenue dropping to 8.6 billion euros, whereas last year it was a smidgen higher at 9.1 billion euros.
The poor financial performance can largely be attributed to the beleaguered steel business that dived into the red zone with a loss of 23 million euros. In contrast, the division boasted an operating profit of 68 million euros in the previous year.
ThyssenKrupp's battle-hardened steel division has been in the process of restructuring for quite a while. The company made headlines last year by announcing plans to chop 11,000 jobs, and the Czech investor Daniel Kretinsky's EP Group already owns a 20% stake in ThyssenKrupp Steel, with a further 30% on the horizon.
CEO Miguel López paints a rather cautious picture of the current fiscal year: "While we are strategically gearing up for a year of key decisions, we can expect this year to be a transitional one financially." López anticipates a more favorable market environment coupled with positive outcomes from implemented measures in the second half of the year.
- ThyssenKrupp
- Steel Division
- Crisis
- Industrial Conglomerate
- India
- Business Year
- Net Profit
Insights:
- ThyssenKrupp Steel is currently facing challenging circumstances, including a €90 million blow due to a bleak economic climate, high energy costs, and planned decarbonization investments[1]. Despite these hurdles, the overall ThyssenKrupp group has returned to profit, mainly thanks to the sale of its Indian electrical steel business[1][3].
- ThyssenKrupp has been burning the midnight oil with heaps of restructuring efforts. The company aims to cut or outsource up to 11,000 jobs but has shifted towards a more collaborative approach with trade unions[2][3]. ThyssenKrupp Steel and IG Metall trade union reached a tentative agreement in May 2025, aiming to steer clear of layoffs and improve competitiveness through a new collective bargaining agreement by summer 2025.
- ThyssenKrupp is making strides to disentangle its economic ties with Hüttenwerke Krupp Mannesmann (HKM), which will free them from the obligation to purchase a significant amount of steel annually by 2032[3].
- ThyssenKrupp anticipates a more stable market environment in the second half of 2025, which they expect to benefit from the implemented restructuring measures. Despite some optimism, uncertainties about future global economic growth continue to weigh on the company.
- Discussions are ongoing about selling additional stakes in the steel business to investors, which could impact the division's future.
- ThyssenKrupp's steel division, currently in crisis, continues to face numerous challenges such as a negative €90 million impact due to economic downturn, high energy costs, and decarbonization investments.
- To address these issues, ThyssenKrupp is looking to community policy and vocational training to upskill its workforce and strengthen overall competitiveness, aiming for a stable business year and a more favorable market environment in the second half.
