By Tino Andresen, Bloomberg 11/12/2012
ThyssenKrupp AG (TKA), Germany’s biggest steelmaker, won’t pay an annual dividend after posting a second straight yearly loss, including a 3.6 billion-euro ($4.7 billion) writedown on its Steel Americas unit.
The net loss widened to 4.7 billion euros in the year ended Sept. 30, the Essen-based company said yesterday in a statement on its website. The loss was 1.29 billion euros a year earlier.
ThyssenKrupp, hurt by losses at plants in the U.S. and Brazil, is selling its Steel Americas and Inoxum units as it cuts the number of business units to five from eight while expanding non-steel operations. Waning demand from the auto and construction industries has pushed down steel prices and squeezed producers’ profit margins.
ThyssenKrupp said last week it ousted three top executives following the ill-fated expansion in the Americas and corruption allegations. Olaf Berlien, Edwin Eichler and Juergen Claassen will leave at the end of the year, according to the company, which said yesterday the supervisory board had agreed to the changes.
“With the changes on the executive board, the supervisory board has sent out a clear signal for a fresh start,” Chief Executive Officer Heinrich Hiesinger said in yesterday’s statement. “We are systematically establishing a new leadership culture based on honesty, transparency and performance orientation.”
Cost Cuts
The sale of Steel Americas is “fully on track,” Hiesinger said at a press conference in Essen today. ThyssenKrupp reversed its losses after his comments, rising 2.4 percent to 16.655 inFrankfurt after dropping as much as 3.4 percent. The benchmark Dax Index was 0.2 percent higher.
Earnings before interest and tax excluding one-time items and results from Inoxum fell 77 percent to 399 million euros. The average of 22 analysts’ estimates compiled by Bloomberg was for 397.1 million euros. Sales from continuing operations fell 6 percent to 40.1 billion euros.
ThyssenKrupp projected adjusted Ebit of about 1 billion euros for the current fiscal year on sales of around 40 billion euros for continuing operations, which excludes Steel Americas. The company said cost cuts will improve Ebit by 2 billion euros in the next three years.
Net debt rose to 5.8 billion euros from 3.6 billion euros a year earlier. The company said it has 6.7 billion euros of cash, cash equivalents and undrawn credit facilities, and its financing is “secure.”
Assets Sale
ThyssenKrupp said Nov. 19 it asked bidders to submit binding offers for its U.S. and Brazilian plants. Cia. Siderurgica Nacional SA, Brazil’s third-largest steelmaker by output, offered about $3 billion to buy the two plants in the Americas, two people familiar with the matter said last month.
“In connection with the classification of Steel Americas as a discontinued operation, a writedown to fair value” was necessary, ThyssenKrupp said yesterday.
Steel Americas’ adjusted loss before interest and tax narrowed to 1.01 billion euros, said Kilian Roetzer, a company spokesman. A year earlier, ThyssenKrupp posted a loss of 1.07 billion euros and took a 2.1 billion-euro writedown on the unit.
The sale of the Inoxum stainless steel unit to Finland’s Outokumpu Oyj (OUT1V) will be completed before the end of 2012 and result in a “significant” cut in debt, ThyssenKrupp said yesterday.
Other European steel companies have also reported mounting pressure on profit from the slump in demand and lower prices. Salzgitter AG (SZG), Germany’s second-largest steelmaker, cut its earnings forecast on Nov. 5, while Luxembourg-based ArcelorMittal (MT), the world’s biggest producer, posted its lowest quarterly profit in almost three years on Oct. 31.
Link : http://www.bloomberg.com/news/2012-12-10/thyssenkrupp-cancels-dividend-after-4-7-billion-asset-writedown.html
BR Deal 
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