Thyssenkrupp AG is weighing a sale of its prized elevator business amid "clear interest from investors" alongside plans to list a partial stake in the unit, the German company said Aug. 8 while outlining another cut to its fiscal 2018/19 profit forecast.
Adjusted EBIT for the 12 months ending Sept. 30 is expected to be just €800 million, down from the previous forecast of €1.1 billion to €1.2 billion. Adjusted EBIT in the previous fiscal year totaled about €1.4 billion.
The company scrapped its plan to split into two and decided to launch an IPO of its elevators business after European antitrust regulators blocked a proposed steel joint venture with Tata Steel Ltd. due to competition concerns.
Thyssenkrupp plans to maintain a majority stake in the elevators business and expects proceeds from the IPO planned for fiscal 2019/20 to improve its financial position and finance restructuring plans. It also announced a review of three loss-making units, including a restructuring plan to turn around operations, failing which it will seek other options including sales.
Regarding the three unprofitable units, CEO Guido Kerkhoff said, "We definitely see opportunities for their further development but not necessarily under the umbrella of thyssenkrupp. We will not allow a situation to continue where businesses with no clear prospects permanently burn money and destroy value that other areas have created."
The three units are springs and stabilizers, system engineering and heavy plate. The first two cater to the automotive sector, and the third makes products for the construction and shipbuilding markets.
Thyssenkrupp plans to operate under a new, more streamlined structure from the start of 2020, targeting a further reduction in corporate and administrative costs.
Loss attributable to shareholders for the third fiscal quarter ended June 30 narrowed to €94 million from €131 million the year before. Adjusted EBIT from its European steel division fell to €1 million, from €227 million in the year-ago quarter, due to lower sales and higher costs, particularly for iron ore.