NEW YORK ThyssenKrupp AG is in "advanced" negotiations with a leading bidder for its Steel Americas unit, the steelmakers top executive said Aug. 13 as the company logged another quarter in the red due to sluggish economic growth and a subdued steel market.
"As we have clearly stated, were not just talking to one guy. Were entertaining discussions with a number of parties as well," chairman and chief executive officer Heinrich Hiesinger said during the companys fiscal third-quarter earnings conference call. "Whats clearly important for us is that we keep track of the interest of the company ... and diligence in this project and not do a fire sale. Weve always said were not in a fire sale."
The steelmakers Americas divisionwhich includes its slab facility in Brazil and rolling mill in Calvert, Ala.recorded an adjusted loss before interest and taxes of 162 million ($215.6 million) for the three months ended June 30, an improvement from a 262-million loss in the same period a year ago.
Order intake increased to 496 million ($660.2 million), up 20 percent from 413 million in the same comparison thanks to positive volume and product mix effects, the Essen, Germany-based steel producer said. Sales, however, slipped 13 percent to 473 million ($630 million) from 543 million due to lower selling prices and lower shipments.
Its Brazilian facility delivered some 1.9 million tons of slab to U.S. processing plants in the nine months ended June 30, while 400,000 tons of slab were sold on the Brazilian and North American markets. The division also sold some 1.9 million tons of flat steel to North American customers.
Earlier this year, ThyssenKrupp said it hoped to sign a sales agreement for its Steel Americas division by May, although Hiesinger said during the conference call that there was no new deadline for the sale.
"Were aiming for a solution," He said. "The steel market ... isnt in the best situation it could be. On the other hand, youll see in certain areas that weve probably seen the trough and some signal that could show that further deterioration might not be there."
The company said its earnings also were impacted by an unscheduled stoppage of blast furnace No. 2 at its slab facility. That facility has since returned to operation and is producing around 5,000 tons per day in its ramp-up phase.
Looking forward, the company said that while sluggish growth persists, particularly in North America, the auto market is a bright spot following strong sales of cars and light trucks in the United States. It added that the real estate market has stabilized and is showing a steady "upward trend."
"Steel prices in the U.S. also softened; however, due to reduced stock levels and recently also as a result of temporary plant closures by some U.S. steel producers, prices recovered towards the end of the first half 2013," it added.