German industrial giant Thyssenkrupp has reported an increase in earnings despite weaker sales, attributing the growth to its ongoing efficiency initiatives. Meanwhile, the company’s military-related divisions anticipate a boost in demand, driven by rising global defense spending.
Thyssenkrupp gave a mixed financial update on Thursday as it highlighted unstable market conditions while highlighting some areas of improvement.
Thyssenkrupp reported a net loss of €33 million for the October-December period, a significant improvement from the €305 million loss recorded in the same quarter last year. The group’s sales declined to €7.8 billion from €8.2 billion, reflecting weaker demand and lower prices.
“Despite the challenging market environment, we improved our performance in the 1st quarter,” CFO of Thyssenkrupp, Jens Schulte, said in a statement.
Adjusted earnings before interest and tax (EBIT) climbed to €191 million in the first fiscal quarter ending December 31, driven by Thyssenkrupp’s emphasis on cost efficiency measures.
“The increase in EBIT especially is evidence that our structural measures to improve efficiency and reduce costs are delivering initial successes,” said Schulte. “We will continue to work systematically on these measures in the future.”
Reports say that free cash flow before mergers and acquisitions also came to a loss of €21m in the quarter. The company also recorded a strong increase in overall order intake, which rose by more than 50% year-on-year to reach €12.5 billion between October and December.
Thyssenkrupp expects a positive cash flow outlook for the 2024/2025 fiscal year, now expecting a positive cash flow between €0 and €300 million. This is a substantial revision from its previous forecast, which projected a loss of €200 million to €400 million, highlighting improved financial stability and operational efficiency.
Thyssenkrupp’s CEO Miguel López added in the financial update that the manufacturer was pushing ahead with restructuring efforts.
“The transformation is driven by the ambition of strengthening the competitiveness of our businesses, generating sustainable growth and thus safeguarding jobs in the long term,” he added.
Thyssenkrupp reaffirmed its plans to spin off its European steel business while also preparing to publicly list its marine division.