Flagging steel recovery time lag, Thyssenkrupp swings to Q3 profit

 Thyssenkrupp on Wednesday swung to an operating profit in the third-quarter on the back of high materials prices and automotive demand, but cautioned the positive impact on its steel division, Europe's second largest, would be delayed.

In the April-June period, adjusted earnings before interest and tax (EBIT) came in at 266 million euros ($312 million), from compared with a 693 million loss last year when the pandemic took a toll on the German conglomerate.

Shares in the submarines-to-car parts group were indicated to open up 1.8% in pre-market trade.

At the group's steel division, which could be spun off next year, adjusted EBIT reached 19 million euros in the third-quarter, compared with a 309 million loss a year earlier.

"This is a good thing, but our long-term contract structures mean there is a delay in increased raw material and steel prices feeding through to our revenues and earnings," Chief Financial Officer Klaus Keysberg said.

"The positive effect on earnings will come. We'll just see it later than our competitors."

Long-term steel contracts mean market developments take about half a year before showing up in Thyssenkrupp's accounts, separating it from peers such as Salzgitter, which on Wednesday posted its highest first-half pre-tax profit in 13 years.

Thyssenkrupp group is trying to simplify its structure after years of underperformance and recently agreed to sell two units.