Guido squawks

9 November 2018 By George Hay Follow @gfhay

Shares in the German industrial group plunged 10 pct after its latest profit warning. The bad news has further rattled investors already lukewarm about its planned breakup. Still, hiccups from unpicking an unwieldy conglomerate don’t make the strategy any less valid.

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Shares in Thyssenkrupp fell 9.5 percent to 17.3 euros on the morning of Nov. 9 after the German conglomerate cut its forecasts for operating profit and net income.

The company on Nov. 8 said it had decided to set aside provisions for a probe by the German cartel office into alleged agreements relating to heavy plate and flat carbon steel products.

As a result, net income in the financial year to September 2018 is expected to drop to 100 million euros ($114 million) from 271 million euros last year.

Thyssenkrupp also set aside provisions for risks arising from unspecified quality issues at its automotive business, pointed to shipping restrictions at its steel unit and warned of lower-than-expected earnings at its elevator unit.

The group now expects adjusted earnings before interest and tax (EBIT) to fall to 1.6 billion euros, from a previous target of 1.8 billion euros. Thyssenkrupp will present its full-year results on Nov. 21.

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