MOSCOW (MRC) -- Thyssenkrupp suspended its 2021/22 forecast for free cash flow before mergers and acquisitions for due to the Ukraine crisis and said it was unclear if it would still be able to spin off its steel division, said the company.
Although the group’s sales from Russia and Ukraine are negligible at significantly less than one percent of total sales, the Executive Board estimates that the group’s business performance will be impacted by the far-reaching macroeconomic and geopolitical consequences of the war in Ukraine. The Executive Board currently assumes that the global disruptions at various points in the supply chain will affect above all thyssenkrupp’s steel and automotive supply businesses. Opposing developments in materials trading, which is benefiting from the current increase in raw material and material prices, and the countermeasures initiated will not be able to fully compensate these impacts.
At the present time, the specific extent of the direct and indirect consequences of the war in Ukraine on the business development of thyssenkrupp is associated with high uncertainties. Against this background – in particular due to rising raw material prices – thyssenkrupp AG suspends its forecast for free cash flow before M&A for fiscal year 2021/2022.
Until the start of the war, business development of thyssenkrupp AG in the first quarter and in the current second quarter of the fiscal year was according to plan. In March, initial negative effects occurred primarily in the steel and automotive supply businesses. At the present time, the Executive Board continues to assume that the adjusted EBIT for the second quarter will still be above the previous quarter. Free cash flow before M&A, on the other hand, will be more strongly impacted by negative price effects than previously expected.
The economic consequences of the war in Ukraine for the group’s business development are also influencing the possible stand-alone solution for the steel business. thyssenkrupp AG remains convinced that the independent positioning of the steel business offers very good prospects for the future. Nevertheless, a statement on the feasibility is at present not possible due to the current economic conditions.
As per MRC, Thyssenkrupp Uhde’s subsidiary Uhde Inventa-Fischer signed a contract to build three new polymer plants for SASA Polyester Sanayi A.S in Adana, Turkey. One plant is planned to produce 1,050 metric tpd (380,000 tpy) polyethylene terephthalate (PET) for low viscosity application combined with a Co-PET plant with a capacity of 100 metric tpd (36,000 tpy). The third plant will use Uhde Inventa-Fischer’s proprietary patented MTR (Melt-to-Resin) technology to produce 330,000 tpy of resin for the production of PET bottles.
Thyssenkrupp Uhde Chlorine Engineers offers world-leading technologies for high-efficiency electrolysis plants. The company, a Joint Venture with Industrie De Nora, has extensive in-depth knowledge in the engineering, procurement, and construction of electrochemical plants and a strong track record of more than 600 projects with a total rating of over 10 gigawatts already successfully installed. With its water electrolysis technology to produce green hydrogen, the company offers an innovative solution on an industrial scale for green value chains and an industry fueled by clean energy – a major step towards a climate-neutrality.