Germany’s biggest steelmaker warned it saw no global economic recovery this year after a slump in steel prices and weak car markets caused a 38% drop in quarterly core profit. Revenue and new orders at Steel Europe were down about 11% in the first quarter, as prices for flat steel fell and customers in the automotive and construction industries drew down their inventories.
Rival steelmaker ArcelorMittal SA last week reported a $3.7bn loss for 2012 after writing down the value of its European steel business by several billion dollars.
ThyssenKrupp chief executive Heinrich Hiesinger is overhauling the Essen-based company to reduce exposure to the volatile steel sector and shift investments into higher-margin products and services, such as elevators, submarines and parts for manufacturing plants.
The company said last week it would slash more than 2,000 jobs at Steel Europe, which accounts for just over a quarter of group sales, in its cost-cutting drive and could see another 1,800 workers go via divestments.
The move will save €500m and is part of the company’s drive to save an overall €2bn in costs.
