FRANKFURT, Nov 22 — Shares of Thyssenkrupp jumped today despite the German industrial giant reporting a massive annual loss, as the group eyes a tie-up for its ailing steel division with a Czech billionaire.

The group recorded a net loss of €2 billion (RM10.2 billion) in the past fiscal year, compared to a healthy net profit in the 2021-22 period.

Its long-troubled Steel Europe division took a US$2.1 billion (RM9.8 billion) write-down, with the company warning of a "gloomy” earnings outlook and "structural changes” to the steel industry.

Nevertheless, shares of the steel-to-submarines group — which runs its financial year from October to September — jumped more than eight per cent on the Frankfurt Stock Exchange.

The results were "once again burdened by high write-downs in the steel business,” said independent markets analyst Andreas Lipkow.

However other numbers — including cash flow and working capital — looked healthier than expected, which helped pushed up the shares, he said.

Once a symbol of German industrial might, Thyssenkrupp has suffered in recent years as falling prices and fierce competition from Asian rivals hammered its traditional steel business.

It is trying to shift to climate-neutral production — without burning fossil fuels — but this needs huge investments.

The group has received two billion euros in German state aid to fund a steel decarbonisation project.

It has been trying to spin off its steel division for several years, which should provide it extra funding to drive the green transition, but failed to find a partner.

However, hopes have risen of a potential solution, after the group entered into talks with the EPH energy company of Czech billionaire Daniel Kretinsky about a potential joint-venture in the steel business.

Today, it described the talks as "constructive and open-ended”.

"The specific form of a potential joint venture is the focus of the ongoing negotiations,” said the company in a statement.

Lipkow said the steel division had been "making life difficult for the industrial group for years... (but) now an option seems to be emerging.”

"The plans still need to be finalised, but represents a serious solution to the problem.”

But the talks have raised concerns among employee representatives, who have criticised the lack of information and job guarantees linked to the plan. — AFP