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Thyssenkrupp shares move lower after group flags decline in 2022/2023 income

By Scott Kanowsky

Investing.com -- Shares in Thyssenkrupp AG (ETR:TKAG) edged down on Thursday after the German industrial engineering company warned that it expects annual pre-tax profit to fall by more than a billion euros year-on-year in 2022/2023, citing difficult current trading conditions.

The Essen-based firm said adjusted earnings before interest and tax will decrease to the "mid to high three-digit million" euro range in its current fiscal year, down from €2.1 billion (€1 = $1.0343) in the 12-month period ended on September 30. The estimate is partly based on elevated input expenses and energy costs, according to a statement provided by the group.

Sales are also seen falling significantly from €41.1B last year, as Thyssenkrupp's materials services and steel units see product prices ease back from recently higher levels.

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"In a market environment dominated by the energy crisis, high inflation and rising interest rates, Thyssenkrupp expects the macroeconomic development in the present fiscal year to be challenging and difficult to plan," it added.

Analysts at Morgan Stanley said in a note to clients that the outlook for 2022/2023 implies "downgrades to consensus estimates," which could contribute to Thyssenkrupp's shares modestly underperforming off the back of the release of its latest annual results on Thursday.

In its fourth quarter, Thyssenkrupp reported adjusted core earnings of €161 million, a 31% decline year-on-year and below consensus estimates of €204M. The miss stemmed from a nearly €100M loss in inventory valuation at the material services division, the Morgan Stanley analysts noted.

Quarterly order intake during the period also slipped by 27% compared to the corresponding timeframe in 2021 to €10.39B, reflecting challenges from supply chain constraints and the war in Ukraine. But, on a full-year basis, the gauge of demand grew by 12%.

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