Thyssenkrupp books $477 million restructuring charge at steel division

By Christoph Steitz and Tom Käckenhoff

FRANKFURT, Feb 12 (Reuters) – Thyssenkrupp unveiled 401 million euros ($477 million) in expenses to fund far-reaching job cuts at its steel division, as the German industrial conglomerate continues talks with India’s Jindal Steel International over a sale of the business.

As a result of the charges, Thyssenkrupp reported a wider first-quarter net loss of 353 million euros on Thursday. Analysts polled by LSEG had, on average, expected a net profit of 32 million euros for the period.

Thyssenkrupp said that a recently reached agreement to pull out of the steel joint venture HKM earlier than planned could add another disposal loss “in the low to mid three-digit million range”.

Shares in the company were indicated 3.2% lower in pre-market trade at 0656 GMT, with traders also citing the group’s free cash flow before M&A – a key indicator of operational health – which stood at a negative 1.5 billion euros.

The ongoing restructuring at Thyssenkrupp Steel Europe (TKSE) is aimed at accelerating negotiations with Jindal Steel International on a potential sale of TKSE, a volatile business that its parent has sought to divest for years.

A solution for the steel business, closely tied to Germany’s industrial history, is seen as the centrepiece of Thyssenkrupp CEO Miguel Lopez’s strategy to turn the sprawling group into a holding.

Such efforts have already seen the company divest and separately list its electrolyser and warship divisions, lifting Thyssenkrupp’s stock price despite a tough macroeconomic environment for the car-parts-to-materials firm.

($1 = 0.8411 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff, editing by Jane Merriman, Ludwig Burger and Thomas Seythal)