LONDON German steel producer and industrial manufacturer ThyssenKrupp AG reported a net loss attributable to its shareholders of 656 million ($843.6 million) for the quarter ending March 31, the company said May 15.
The company blamed the loss in its financial second quarter on impairment costs related to the continuing sale of its Steel Americas division, which has just taken a further write-down of 683 million ($887 million), it said.
The steelmaker reiterated that negotiations on the sale were continuing and confirmed that it "remained focused on signing a deal for Steel Americas promptly."
"The disposal process for the two plants of Steel Americas is ... running to plan," chief executive officer and executive board chairman Heinrich Hiesinger said.
The Steel Americas unit, which is now listed as a discontinued operation, saw order intake drop 19 percent year on year to 509 million ($655.2 million) and sales fall 8 percent to 501 million ($644.3 million), the company said.
ThyssenKrupps earnings before interest, taxes, depreciation and amortization (Ebitda) for continuing operations in the January to March period fell by 58 percent to 240 million ($309 million) from 571 million in the same period last year due to the effects of the difficult economic climate, the group said.
Net sales from continuing operations in the companys second fiscal quarter amounted to 9.1 billion ($11.7 billion), an 11-percent drop year on year, partially due to declines in the components and materials businesses.
ThyssenKrupps order intake also fell by 13 percent year on year to 9.68 billion ($12.5 billion) because of lower demand as well as divestments in the components and materials segments, while low volumes and prices weighed down orders in the Steel Europe and global materials trading divisions.
Looking at the different divisions, ThyssenKrupps materials services business had a poor January through March period as earnings before interest and taxes (Ebit) swung to a loss of 157 million ($201.9 million) compared with a profit of 74 million in the corresponding period in 2012.
The poor performance was due to the economic slowdown across all regions with the exception of North America, the group said.
Steel Europe also posted negative Ebit of 10 million ($12.9 million) in the period compared with positive earnings of 21 million in the first three months of 2012.
Lower average selling prices were mostly to blame for the challenging quarter, the company said.
"Demand for metallurgical raw materials remained weak as a result of numerous production cutbacks and stoppages in the steel industry," ThyssenKrupp added.
However, the company said it is still optimistic in the longer term.
"Despite a persistently difficult economic environment, we are on track to meet our operating targets for the full year," Hiesinger said.
A version of this article was first published by AMM sister publication Steel First.