ThyssenKrupp Reports Huge Hit on Stainless Steel

Company took $3.9 billion in writedown on U.S. stainless steel business.

Industrial giant ThyssenKrupp said on Dec. 2 that it booked heavy losses in its business year just ended owing to massive 2.9 billion euros (US$3.9 billion) in writedowns on its U.S. and stainless steel businesses.

ThyssenKrupp said it booked bottom-line net loss of 1.783 billion euros in the 12 months to September compared with profit of 927 million euros a year earlier, on a 15% rise in sales to 49.09 billion euros.

The group -- the world's 14th-biggest steelmaker and also a leading manufacturer of elevators, submarines and car parts -- explained that it had decided to write down 2.9 billion euros on its U.S. and stainless steel businesses because book values of those assets were "no longer in line with market conditions."

There had been cost overruns on the construction of a plant in Brazil, which could not be offset in the near term and there was renewed weakness of the markets in the U.S. and Europe, "which is hampering market entry for the products of the Steel Americas business area," it said.

"The current environment is not easy," said chief executive Heinrich Hiesinger, who took the reins of ThyssenKrupp at the beginning of the year.

But "writedowns show that we're doing everything necessary," he said.

Copyright Agence France-Presse, 2011

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