Klockner-Werke faces further losses

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The Independent Online
KLOCKNER-WERKE, the German steel and engineering group, will continue in the red this year, after massive losses in 1992 drove it to seek protection from creditors in December.

Hans Christoph von Rohr, chairman, said he expected the group net loss in the current business year ending September to top DM200m ( pounds 86m). It plunged to a loss of DM560m last year.

'Steel earnings have nose-dived to a level that roughly corresponds to 1961,' said Mr von Rohr. 'Too much capacity, imports not priced according to market conditions, European subsidies, these are the elements of a scenario that threatens every European steel firm.'

Klockner said it was proposing to cut its capital as part of a plan to restructure its debt. The group is seeking relief from up to 60 per cent of its DM2.7bn debt.

Compounding the gloom about the German economy, the Berlin- based DIW economics institute said yesterday it expected private consumption to decline considerably in the first quarter of 1993.

Meanwhile Stern magazine reported that Mercedes-Benz could run up operating losses as high as DM3bn in 1993. It said a DM2bn loss was already written into the firm's current business plan.

The magazine quoted a management source as saying this figure might have to be adjusted in the light of atrocious market conditions. Mercedes refused to comment on what it called 'fairy-tale figures'.

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