Thyssenkrupp shares fell to a three-year low on Tuesday after the company warned that economic and political uncertainties were growing as it unveiled disappointing results.

The German industrial group, which produces a range of products from steel to elevators, reported a sharp 37 per cent drop in operating earnings in the last three months of 2018 — the first quarter of the company’s financial year.

This sparked investor concern as the group took a hit from higher start-up costs for projects, higher material costs in China and tariffs on imports to the US.

Guido Kerkhoff, who became chief executive in July, insisted that “fundamental growth drivers are intact” and confirmed that the group was still aiming to achieve adjusted operating earnings “above €1bn” this year, up from €706m last year.

Although the shares were down only 2 per cent on the day, the company’s equity has plunged 46 per cent since July 2017 because of worries over restructuring plans.

The slow progress of the restructuring prompted the departure of the chairman and chief executive last summer.

The group unveiled new details of its plans to separate its industrials business from its material operations on Tuesday, saying the two management teams will be decided in the spring.

Details of the financial structure, brand identity and strategy of each company will be announced in May. Both are set to start operations on October 1.

The results matched market forecasts, although some analysts worried about the outflow of cash, which had caused net debt to double from the previous quarter to €4.7bn.

“It raises questions about the balance sheet strength,” UBS analyst Carsten Riek said. “I don’t think they need an equity raise, but the market clearly worries about it. That’s why shares are down.”

He calculated that in the past 12 years the company has burnt through €8.8bn in cash. “That is a problem” he added. “The company aims for €1bn free cash flow a year. It’s achievable, but we haven’t seen it yet.”

Thyssenkrupp has been forced to raise capital twice since 2013 by diluting shareholders while it has been trying to restructure the company. The number of board directorates will be reduced to three and central functions will be combined under the restructuring plans.

Its 17 corporate and service functions will be cut to 14 at the industrials group and 10 in the materials side of the business. General and administrative expenses should together be less than €300m a year, down from €380m last year.

“With the separation we will create strategic clarity and enable the businesses to develop more dynamically,” Mr Kerkhoff said. “The new leadership structures are key to this.”

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