Thyssenkrupp AG (DE:TKA) shares gained over 7% in anticipation of the divestment of the company’s steel business. Investors also cheered the company’s outlook of a return to sales growth and positive cash flow after seven years. As a result, Thyssenkrupp shares were among the top performers in Europe on Wednesday.
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The company also proposed a dividend of €0.15 per share in its annual report, similar to last year’s payment.
Thyssenkrupp is a diversified group with multiple business segments, including industrial components, automotive technology, steel, marine systems, and more. The company operates in approximately 48 countries worldwide, showcasing its global presence and diverse range of operations.
The Saga of the Troubled Steel Business
Thyssenkrupp reported a net loss of €2 billion for the fiscal year that ended in September 2023 due to its struggling steel business. It attributed this setback to soaring prices for gas and other raw materials. In the fourth quarter, the company’s operating profit declined by 45% to €88 million.
The company further stated that the lower spot price for steel resulted in a 6% decrease in its steel division’s sales, amounting to €12.4 billion. This offset the shipment volumes, which remained consistent compared to the previous year. Citing the dull outlook for the sector, the company announced a €2.1 billion impairment on its steel unit. This highlights the challenges in securing a deal with Czech energy group EPH for the partial sale of its steel business.
Thyssenkrupp, which has been trying to sell its steel business for quite some time now, still values it highly and hopes for a positive outcome soon.
What is the Price Prediction for Thyssenkrupp?
According to TipRanks, TKA stock has been assigned a Hold rating, backed by two Buys, three Holds, and one Sell recommendation. The Thyssenkrupp share price prediction is €9.03, which implies an upside of 27%.
