Thyssenkrupp Stock Plunges On Steel Cartel Probe 'risk'
Faizan Hashmi 2 months ago Fri 09th November 2018 | 06:24 PM
Shares in German industrial giant Thyssenkrupp plummeted Friday after the embattled conglomerate said it expected the fallout from a steel cartel probe to put a "substantial" dent in profits.
Shares in the group, which makes everything from submarines and elevators to steel and auto parts, dropped 10.7 percent to 17.01 Euros ($19.2) by 1025 GMT in Frankfurt, putting it at the bottom of a DAX 30 index down 0.5 percent.
The 207-year-old firm issued a profit warning late Thursday saying it was bracing for "substantial adverse consequences" to earnings as a result of an investigation by Germany's Federal Cartel Office.
The probe centres on allegations that steel companies colluded to raise prices for heavy plate and flat carbon steel products.
Thyssenkrupp said it would be setting aside risk provisions "due to new developments" in the probe.
The inquiry was "about cases in the past", he stressed.
Adding to its woes, Thyssenkrupp said it also had to set aside provisions related to "quality issues" in its technology components division, which makes parts for cars and other machinery.
Thyssenkrupp's profitable elevator unit also performed "below expectations" in the fourth quarter of the group's fiscal year, the statement added.
The latest troubles come after months of turmoil at Thyssenkrupp, which was hit by a leadership crisis over the summer after two bosses quit following a clash with activist investors calling for an aggressive restructuring.