Thyssenkrupp sees 'signs of recovery' after Covid hit

Troubled German industrial giant Thyssenkrupp said Wednesday it narrowed losses in the first quarter, buoyed by a "recovery" in demand for steel and car parts after the initial hit from the pandemic.

The Essen-based group, which is in the throes of a painful restructuring, posted a net loss of 141 million euros ($171 million) between October and December, compared with a 449 million euro loss over the same period a year earlier.

The group made an adjusted operating profit of 78 million euros, reversing a loss of 185 million euros in its first quarter a year ago.

"We're noticing signs of an economic recovery and our measures are starting to bear fruit. But we're not out of the woods yet," CEO Martina Merz said in a statement.

The long-struggling conglomerate, which employs around 100,000 people, last year sold off its lucrative elevator business to fund a turnaround plan that will include 11,000 job cuts.

The coronavirus outbreak compounded Thyssenkrupp's woes, pushing it deep into the red in its 2019/2020 fiscal year as lockdown measures closed dealerships and disrupted production at factories around the world.

But the group said economic activity picked up in the final stretch of 2020 and it saw strong demand for car parts and industrial components used in wind energy, particularly in China and Germany.

Catch-up demand from the auto and construction sectors also boosted Thyssenkrupp's long-struggling Steel Europe unit, which has been battered by years of cheap Chinese competition.

Thyssenkrupp has repeatedly indicated that it is looking for a partner to shore up its steel operations. It has yet to formally respond to a takeover offer from Britain's Liberty Steel last October.

Looking ahead, Thyssenkrupp said it now expects a "significant improvement" in full-year adjusted operating earnings towards "almost break-even", after earlier forecasting a pre-tax loss in the mid three-digit million euros range.