Strong steel prices contributed to strong third-quarter financial results

The operating profit of the German steel concern Thyssenkrupp in the third quarter increased almost three times against the background of rising steel prices. On the other hand, the company faced high raw material prices and rising interest rates. Reuters reports about it.

The company’s adjusted earnings before interest and tax (EBIT) reached €721 million in the April-June period, compared with €266 million in the same period last year. More than half of that, or 376 million euros, came from the company’s steel business.

“In the third quarter, we were again affected by the rise of the price of commodities and other materials,” Chief Financial Officer Klaus Keysberg said. “However, we expect a considerable easing of net working capital and a clearly positive cash flow in the fourth quarter.”

Also as Thyssenkrupp point out, that their capex in the 2021-2022 financial year, estimated at €1.4 billion, will be reduced by €200 million compared to the prior year’s level due to uncertainty.

As GMK Center reported earlier, ThyssenKrupp could face production shutdowns and even equipment damage in the event of a gas shortage as it fails to switch its production processes from natural gas to crude oil or coal. ThyssenKrupp can deal with production constraints “to a certain extent”. At the same time, mills have more gas self-sufficiency than downstream users, as they can capture gas created during the steel and ironmaking process and re-use it.