German conglomerate Thyssenkrupp’s share price tumbled more than 10 per cent this morning after the steel producer issued its second profit warning since July.
Blighted by quality issues at its automotive units and a steel cartel investigation, the Essen-based group said it now expected full-year operating earnings of €1.6bn (£1.39bn), compared with €1.72bn last year.
Net profit is forecasted to hit €100m, despite the group previously saying in July that it was aiming a “significantly” better result than the €271m it posted in 2017.
Shares tumbled 10.65 per cent in mid-morning trading.
The company, which is currently being investigated over allegations that its steel division was involved in a cartel to raise prices, said today that it needed to “accrue risk provisions” in the wake of the probe.
Thyssenkrupp said it had decided to set aside risk provisions for the probe by the country’s cartel office into alleged agreements relating to heavy plate and flat carbon steel products.
“We have taken this matter very seriously from the very beginning and, with the help of an external law firm, conducted our own internal investigation,” board member Donatus Kaufmann said in a letter to employees that was obtained by Reuters.
“In the meantime, we have obtained information in the investigation which has led us to accrue a provision in the group financial statements.”
Today’s results news comes after a turbulent several months for Thyssenkrupp, which saw the resignation of its chairman and former chief executive over the summer in the wake of mounting pressure from investors.